Ladies and gentlemen, good day and welcome to Marico Limited FY 2024 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 for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Before we get started, I would like to remind you that the Q&A session is only for institutional investors and analysts, and therefore, if there is anybody else who is not an institutional investor or analyst but would like to ask questions, please directly reach out to Marico's Investor Relations team. I now hand the conference over to Mr. Saugata Gupta for his opening comments. Thank you, and over to you, sir. Yeah. Hi, good evening to all those who have joined the call, and hope all of you are doing well. FY 2024 having come to a close, I would like to reflect on the operating environment during the year and the quarter gone by, after which I shall touch upon our performance and our strategic objectives going forward over the next three years. The FMCG sector has been fairly resilient amidst challenging circumstances during the year. Volumes growth for the sector on a normalized basis has remained stable, even while grappling with volatile input prices, erratic climate events, subdued environment in the general trade channel, and slower than anticipated recovery in rural demand. Similarly, in Q4, the operating environment remained largely consistent with preceding quarters. While urban growth slightly moderated, rural growth witnessed a visible uptick towards the end of the quarter. Premium segments maintained their lead over mass segments across FMCG categories, with improved macroeconomic indicators, enhanced government spending, a favorable monsoon forecast, moderate retail inflation, and reduced volatility in commodity prices. The upcoming year holds promise for a gradual uptick in consumption sentiment across both urban and rural. Moving to our performance in Q4, domestic volume growth inched up sequentially, with steadying trends across a majority of our portfolio. Domestic volume growth was flattish after three quarters of decline, owing to incremental anniversarization of pricing drops taken in key portfolios last year. We expect domestic volume growth to trend up consistently from FY 2025. we have continued to witness healthy uptakes, with 75% of the business either gaining or maintaining market share and 100% sustaining or enhancing penetration. Jumping into domestic business, we shall touch upon the key trends in each of our categories. Parachute has seen steady recovery over the last three quarters amidst resumption of loose to branded conversion, as copra prices have inched up on expected lines. This shift also reflects in the 50 basis points gain in market share. We expect an improving trajectory in volumes, driven by the favorable trend in copra prices. Gradual escalation in copra prices is positive for the brand, as it affords us the opportunity to strategically leverage the brand's pricing power and the tremendous procurement system advantages we have versus other brands, and thereby gain volume, traction, and market share. In response to the rise in copra prices so far, we have already implemented price hikes in select packs towards end April, amounting to 6% increase at a brand level. We could take another round of price hikes in case of any further rise in copra prices during the course of this year. Saffola Oil has also exhibited stability as trade sentiment ease, with both input and consumer pricing stabilized. With pricing decline abating early next year or this year, sorry, revenue growth is expected, trending to the positive direction in this year. Offtakes for the brand have remained healthy, and we expect the portfolio to gradually resume a steady growth trajectory. During the quarter, we initiated range advertising under the master brand, Saffola. We're launching a powerful campaign on the importance of taking Roz Ka Healthy Step. So Saffola's entire range of offerings, comprising Edible Oils and Foods, which emphasize the fact that healthy living is a lifelong journey and not just a temporary fad. We believe this is a first step towards leveraging the equity of the master brand, which will enable far more efficient brand-building investments going forward across the entire portfolio. Value-added oils had an optically weak quarter on a high base, while there have been sluggish demand and higher competitive intensity at the bottom of pyramid. The performance largely reflected the subdued sentiment in the mass BPC segments. Notably, our mid and premium segments of value-added hair oil have continued to fare better. While we had a challenging year in the bottom of pyramid segment, we expect a more rational competitive environment going ahead, given the significant bearing it has on profitability. We anticipate a gradual pickup in the franchise's performance next year, driven by a strategic focus on premiumization of the sales mix and augmented investment in brand building, which may be supplemented by an improving consumption sentiment in mass BPC categories and more innovation from our side. Foods had a healthy quarter, with Organic Foods portfolio comprising Oats, Honey, and Soya Chunks growing in double digits. We have closed the year about 4x the scale of FY 2020. This is short of the revenue aspiration set earlier, as we took a step back this year to reset a few fundamentals in order to be able to drive consistent 20%+ CAGR in Foods over the medium term. This involved refined refinements in our supply chain and GTM strategies and strengthening the cost structure. We now believe we have the building blocks in place to double the scale of Foods business by FY 2027 and drive consistent improvement in profitability. Each of these organic components get critical mass. We have expanded gross margin of Foods by about 800 basis points in FY 2024 through some of the aforesaid initiatives, and expect this to further improve as we scale up. Within the Foods portfolio, the Oats franchise maintained its category leadership with healthy growth in offtakes. Saffola Soya Chunks continues to scale well, while Saffola Honey emerged as the fastest growing brand in terms of penetration within the category and continued to gain market share. True Elements and Plix have also sustained their accelerated growth momentum. Premium Personal Care has maintained its healthy growth led by digital-first portfolio, clocking an exit ARR of around INR 450 crore. Beardo has scaled to about 3x since FY 2021 and achieved positive EBITDA this year. We will aim to move Beardo to double-digit EBITDA margin FY 2025. Just Herbs surpassed INR 100 crore ARR milestone FY 2024, while the traction in Plix's personal care portfolio has been encouraging. Both Plix and Just Herbs have been scaling with minimum cash burn. We now have a playbook and considerable in-house capabilities to scale digital brands profitably and aim not only to double the ARR of digital-first brands FY 2027, but to also achieve double-digit EBITDA margin in the portfolio. Taking the growth trajectory and business drivers into account, we believe both Beardo and Plix have the potential to reach INR 500 crore each in terms of turnover in next four to five years' time. With the new businesses contributing to over 20% of the domestic revenues, our portfolio diversification objective has led to a marked shift in the revenue construct and reduction in commodity linkages of margin and revenue growth. We will sustain the aggression to drive 20% CAGR in these portfolios and expect the composite share of Foods and Premium Personal Care, including digital, to reach 25% FY 2027, accompanied by a visible improvement in their profitability. During the quarter end, quarter and the year, alternate channels continued to gain salience while general trade has been subdued by profitability pressures as a consequence of muted growth and pricing corrections in mass categories. We have observed that over the last few years, while disproportionate focus and investment on premiumization and innovation by the sector, coupled with the emergence of D2C, has led to a quantum leap for alternate channels, the GT channel has been under pressure. However, we believe that the GT channel will remain a source of long-term competitive advantage for large organized players and primary channel of our mass or core categories to thrive in over the medium and long term. While the price cycle turns positive, we have been taking initiatives to enhance the profitability of our general trade channel through stock reduction and selective credit extensions. Over the last couple of years, we have also implemented a sales framework that enables us to continue winning in the marketplace by strengthening our micro-market focus and execution, bringing enhanced agility and leveraging technology and analytics. We have successfully streamlined processes and ironed out teething issues faced during the restructuring of the operating model over the last six months, and expect much more positive outcomes going ahead. Lastly, we also observed that the pace of expansion in our distribution reach has slowed down post the pandemic. Therefore, in this direction, we have also rolled out a definitive plan to transform our direct reach over the next three years through the rollout of Project SETU. Project SETU has a phased three-year roadmap to expand our direct reach from 1 million outlets currently to 1.5 million outlets FY 2027, taking the total to direct reach multiplier from 5.8x to 4x, which would be one of the best in the sector. We have committed investments of INR 80 crore-INR 100 crore FY 2027 towards coverage and infrastructure enhancement and demand generation initiatives, which will not come at an incremental cost to the company, but will be funded by reallocation of resources to optimize our spend in the wholesale channel, organized trade, savings for improving process efficiencies, reducing wastage on supply chain, and large-scale use of technology and analytics. Over the next three years, we will deploy analytical capabilities to concurrently weigh the return on the investment and ensure Project SETU is cost neutral. In addition to improved direct reach and weighted distribution, we and especially in challenger brands other than the core, we expect Project SETU to drive market share gains across categories in urban and rural, as well as to enhance assortment levels in urban stores, thereby enabling diversification and premiumization in our domestic business. We will continue to drive differential growth in our urban-centric and premium portfolios and large packs through organized retail and e-commerce channels. Therefore, our focus will be to deliver consistent and competitive growth through a much sharper and targeted portfolio SKU strategy channel. Amidst the backdrop of improving macro indicators, we expect a gradual uptick in the growth of our core categories through these concerted efforts of reviving growth in the GT channel. We further, with pricing headwinds behind, we expect domestic revenue growth to outpace volume growth from Q1 2025. Moving to international business, we have rebounded to double-digit constant currency growth in this quarter and expect to retain the momentum in FY 2025 and beyond. The Bangladesh business has recovered strongly on a sequential basis amid the challenging environment on the back of its broad-based portfolio and robust fundamentals of the business. We expect the business to grow in double digits going ahead. In Vietnam, we are seeing a slowdown in HPC demand, although the expanded portfolio, which now comprises three distinct female personal care brands, should enable us to hold strong in the meanwhile. Over the last couple of years, we are seeing a strong ramp-up in our MENA through the expansion of Hair Oils portfolio in Egypt and the Gulf region, as well as healthy traction in the haircare and healthcare portfolios in South Africa. This has accelerated the broad-basing of our business, reflecting a reduced dependence on the leading market, Bangladesh. We expect the revenue share of Bangladesh, which was more than 50% in FY 2022, to reduce to about 40% by FY 2027. In addition to strengthening the growth prospects of the business, the ramp up of MENA and South Africa adds margin upside potential through scale benefits in the medium term. To sum up, consolidated revenue growth has moved into consistently positive territory in Q4, and we expect it to trend upwards during the course of FY 2025. We believe we put in place building blocks to deliver double-digit revenue growth through consistent outperformance vis-à-vis category and market share gains in the domestic care portfolios, core portfolios, accelerated growth in Foods and Premium Personal Care, and double-digit constant currency growth in international business. We have delivered our highest ever operating margin FY 2024, led by robust gross margin expansion, even while investment towards brand building, which was at 10% of sales, remained a key thrust area. While key commodities are exhibiting upward bias, we are confident that we'll be able to maneuver margins through pricing, driving more favorable mix and cost management and procurement gains to hold steady in the coming year. In the medium term, we expect operating margin to structurally inch up over the next few years, with leverage benefits elevating as well as premiumization of portfolios and diversification across both the India international business. With that, I will now close my comments. Thank you for your patient listening, and we'll now take all your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions 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 questions. 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 Institutional Equities. Please go ahead. Yeah, thanks. My first question is on Foods vision. Doubling in three years, that would mean 25% CAGR. And related question is, taking direct reach from 1 million to 1.5 million, Project SETU. For both these, do you need to do more M&A, or is it based on the current portfolio largely? So as far as Project SETU is concerned, as you know that I think, especially in certain states, we are under-indexed in distribution. We believe that, post-COVID, we haven't had significant increase in distribution, and, and therefore, a lot of places we want to move it from indirect to direct. I think the current core is good enough, but yet you could see far more aggressive participations in the, you know, some of our core categories, especially value-added hair oils. And, I think this SETU is, specifically focused at certain states where, as I said, we are under-indexed. And most of it is by two things: What we are doing in the rural, a lot of, expansion in direct distribution, including quality of direct distribution. In the urban, a far more perhaps a segmented approach in Foods and, Premium Personal Care. We have kept an outlay of around, you know, INR 70 crore-INR 100 crore over the next three years on SETU, which will be funded internally from some of the savings and the reallocation of resources within the overall sales system, as well as cost management across the organization. But this is a very, very big bet for us, where we have put a dedicated team, including senior leadership, to drive this as a, you know, big bet over the next three years. Sure. One related question is on the India demand. Some companies have started talking about high single-digit, double-digit volume growth in some quarter FY 2025, and some companies are also saying that going ahead rural will grow faster than urban. I think it will differ company to company. Wanted to understand for Marico on these two aspects in terms of, say, volume growth for the full year for the India business and in terms of rural versus urban, what will be your take for Marico? So I think we are definitely seeing increased rural uptake, you know, especially during the end of the quarter, we have seen that, while urban has moderated. The way we see it, obviously, as far as we are concerned that, as far as the core is concerned, definitely there'll be far better rural, you know, growth. Also, I think the benefits of Project SETU will start kicking in, in the second half. See, for Marico also, we have a significant digital business, and that digital business, as you know, is growing, and therefore that is essentially a little bit of urban. But as far as the core of business is concerned, I think rural demand will be significantly showing improvement, at least as we gradually move towards the second half of the year. As regards, I think we are in a position to perhaps, at this stage, to say that we look forward to give a, giving a double-digit revenue growth. Now, the composition of volume and inflation, we will see as it pans during the year. Sure. My second and last question is on Bangladesh. So you have come back to decent sales growth, and you are aiming for a double-digit growth going ahead. So wanted to understand, because we keep hearing that there is a currency issue there. There is overall some level of anti-India sentiments also. I don't know if that does impact you. And overall economy also facing a lot of challenging times. So in that context, wanted to understand this acceleration in growth, is it coming because Parachute has taken price hike and you do have a sizable Parachute business? But in terms of volumes and market share, if you could comment, how are things shaping up there? I think volatility, you know, in a post-COVID world, is here to stay, and I think black swan events have to be, get integrated into any company's risk management framework, okay? And in terms of volatility, we always believe the strong get stronger and the weak get weaker, and it has been seen during COVID, in India, where organized players have gained share. I think Bangladesh, we have a relatively strong position, and we are extremely robust. Obviously, this last quarter sales has been on the back of volume growth and market share gains. As you also know, I think, we have significantly reduced dependence on Parachute in that market, where whether it's value-added hair oil, shampoo, baby, they are also driving a lot of our incremental growth. I think we have a very full-fledged, you know, much more, you know, broad-based business out there. And therefore, given our distribution strength, given our brand strength, I think in spite of some of the, you know, you know, issues in the country. But having said that, I think the Bangladesh situation is far better in terms of economic growth, and we believe a lot of the currency and this one will, you know, get better as things progresses. And I think we are seeing a significant, you know, at least an improvement on the ground situation as far as our brands and our position is concerned. Sure. Thanks a lot, Saugata. All the best. Thank you. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Saugata. Thanks for the opportunity. Saugata, I just wanted to look at, you know, understand Project SETU a little better and, you know, clarify a point. Now, in addition to this benefit that could come in terms of reach and hence to segment-level growth rates, do you see it fair to see such a reduction in inventory lowering the impact of channel downstocking or upstocking that is witnessed during periods of copra and vegetable oil price change? Well, I think, see, the two things, what it does is, first of all, it radically improves the quality of distribution. Now, what happens is that, if you look at it, say a core brand like Parachute or say Shanti Amla in the north or Parachute in the south and west, obviously will have a huge—it's based on pull, and therefore is a huge indirect reach. What happens is the moment you move from indirect reach, and wholesale-dependent reach also is a factor of a significant pull, what happens is that the wholesalers, or if you depend on indirect reach, they only focus on a limited amount of SKUs, which have significantly high velocity. When you drive direct reach, it increases your range, it increases your assortment, it increases your control. It also leads to better rates, because sometimes, you know, wholesale, you know, discounting and dumping leads to some kind of a rate instability. So it gets far more control. Now, direct reach also ensures that while entire rural, I have a technology-driven, live visibility of what is happening in the system, and therefore, perhaps the cost of doing sales this will go down. Also, as you know, we don't have, we don't do sachets, and therefore, our portfolio, you know, mix is reasonably good in rural. You know, we, the kind of brands we sell, whether it's Parachute or some of the value-added hair oils, and therefore, our break even as you drive rural distribution, is fairly attractive. Now, what had happened in reality was that post-COVID and our focus on driving diversification, perhaps this had taken a backseat, and therefore we didn't do significant improvement in our direct distribution. We strongly believe that for mass companies in the core categories, direct distribution, especially rural, will be a source of long-term competitive advantage as opposed to indirect distribution. Because in the urban, especially in OT, you can buy distribution in some way. This one requires significant investment in infrastructure, it requires scale, operational efficiency, and huge investments in technology. And this is what we intend to do. As you know that we also compete with a lot of small players who will never be able to do that kind of investment. And this is something we are now determined to do, and this will actually drive three, four things. It will drive range selling, it will drive far more weighted distribution. Now, you know, if you want to compete or challenge our ability to take on certain brands or challenge, where we are challengers, we'll be far better, especially in some parts of the country, like north, where we are slightly under indexed compared to south and the west. It will also lead to, as I said, far more, you are right, in terms of smoothing and lowering of sales. We don't have to depend on the indirect channel for some of our growth. Got it. Got it. But as I clear, and there is a lot more benefits from sales perspective and reach perspective in terms of quality, that is what you're targeting. Got it. Got it. The second bit, I just was, you know, your comments on pricing growth coming back in Parachute, vegetable oils decline coming in the base, Foods sector doing well. I just wanted to reconfirm that our expectations FY 2025 are at double-digit revenue growth and low teens profit growth remains, or is there any update on that? No, I think directionally it remains that way. Okay, perfect. That's all from my side. I'll come back in the queue. Thank you. Thank you. Thank you. The next question is from the line of Percy from IIFL. Please go ahead. Hi, sir. Questions on a couple of the core categories. So, in VAHO there is still a sales decline. Just wanted to understand, when will the pricing annualize? And secondly, even apart from the price reductions, I would guess that the volume is probably either marginally negative or just marginally positive. So what do we need for the volume growth in VAHO also to accelerate? And the same question is for Saffola also. Saffola volume growth is not bad at, I think, around 5%, but there is a significant price cut which is going on, so when will that sort of anniversarize on a YOY basis is something that will help in the modeling exercise? Yeah. So I think as far as Saffola is concerned, Q2, it will anniversarize. In, in terms of, you know, you getting into a level because the last price drop happened sometime at the end of Q1, it got initiated sometime in June, July. So, and, our current, you know, estimate indicates it will be, you know, I don't see too much volatility in the immediate term as far as Saffola is concerned. In, you know, as far as, you know, VAHO is concerned, I think there are two things to be taken. Yes, sometime during the next two, three months are what I call the shrinkflation anniversarization will happen. When it's not just a pricing, but it is a shrinkflation anniversarization, because some of it, as you know, in our 10 and 20 packs, because of, you know, post inflation, we were, we took down the millilitrage, so therefore that will happen. Now, in VAHO, we, however, are wanting to focus a little differently. We are focusing on value growth right now, and it's very important once that, you know, anniversarization happens, we get back into positive value growth territory. There is obviously competitive pressures at the bottom of pyramid. But the good thing is, since the last, while I'm not getting into exact details or breakup, in, from the last quarter, we are beginning to see volume growth and therefore better mix growth by our, performance in the non-bottom of pyramid, where we are also gaining some share. Okay? And therefore, that should lead to the value growth happening. We also expect that there will be some rationality in competitive intensity at the bottom of pyramid, because consistently putting that doesn't make money for anyone, you know? Right. Right. Also wanted to understand on the digital brands, like in Foods, you have said that in three years you want to double the turnover. Any such targets for the digital brands? Yeah, 2x again, three years, because if we have to maintain, so our endeavor is the entire portfolio, which is the diversification portfolio, which is Foods digital, has to grow at 20%+ every year. So that's the aspiration. And I think in digital, as I said, that, we are very excited that, about the way Plix and Beardo is scaling up. And I think I have reinforced this, I think Marico, we should be, I think we have now a reasonable playbook to ensure that we profitably scale up that business. Right. And lastly, on your overall consolidated margins, we are already sitting at, very decent, kind of margins versus history. So over a two to three-year period, what kind of headroom do you see, in margins, if at all, any? Pawan, would you like to take this? Percy, this is Pawan. So yes, there are some structural levers in place, which we believe we could deploy as we go ahead, and there could be some possibility of improvement of margins over the next two to four years. Now, some of the things that we can talk about is, let's say, for example, Foods, you would have seen that we have expanded the gross margin this year by 800 basis points. So that itself has given a significant ramp up. And some of the initiatives that we have taken was during the year, and therefore full year benefit will flow through the year next year. Similarly, we are making big strides in margin improvement in digital business next year. Also on the back of a significant enhancement this year. So Beardo has broken even, and we aim to move to double digit EBITDA next year. You would have also noticed that we have started the master brand campaign in Saffola, which will help us optimize the A&P spend. And similarly, some rapid scale up in some of the international territories will build operating leverage, and that will aid margins. Apart from that, Saugata also spoke about premiumization, so we'll also try to drive a better mix, and we do expect that share of portfolio with higher margin profile will also increase, having a positive rub off on the overall margins. So with all these levers in place, I believe that there is still an opportunity of margin improvement over the next two to three years. However, if for immediate next year, given the fact that we have inflationary pressures, we do not see any margin improvement happening next year, but of course, we will definitely strive for healthy profit delivery. Okay, okay. Very helpful. Thanks, and all the best. Thank you. The next question is from Manoj Menon, from ICICI Securities. Please go ahead. Hi, team. Before the questions, I just want, just have a clarification. So did I hear correctly that you, did you mention that the relative competitive intensity in VAHO is likely to get better? Hopefully, at the bottom of the pyramid is what Saugata mentioned, because there has to be some rationality with respect to the way it is happening at this point in time. Sorry, Pawan. Yeah, but in any case, just to clarify that we will continue to focus in ramping up the, you know, the slightly higher RPI end of the business. The- And also just to add, Manoj, in fact, ex of BOP segment, we have grown well, and in fact, we've also gained share in ex of BOP segment. So definitely we are doing a good job in the mid to premium segment. Because of hyper competition at the bottom of pyramid is where we are facing stress. Pawan, BOP would mean only Shanti or, would you include other brands? Basically, Shanti and Sarson. Shanti and Sarson, which is, that's it, which operate. Understood. Very clear. Secondly, on the D2C, I just want to double-click on a couple of things, actually. One, you know, let's say D2C brands are about 5% of the overall India revenue today. You know, there is an opportunity to go online to offline, et cetera, et cetera, and even companies, which has been predominantly online, has created, you know, Plix, which means that company like Marico are conceptually for the success proportion ratio, let's say in offline should be far higher. But could you talk a little more in detail in each of these four brands, which one you actually see the higher opportunity online to offline? And is that one of the key considerations in the guidance of doubling of revenue in D2C? Another one, just, Saugata, one last thing on the D2C part is, if you would also talk about, you know, organizational changes, if any. Yeah, so those would be helpful. Thank you. See, I think I will just give you a more, you know, high-level view on the movement to GT. See, as far as startup brands is concerned, I think Food is far more easier to first get into GT, because I believe that just a digital-only model for Foods, nutraceuticals is an exception, because nutraceuticals are high margin and high AOV. Anything which has low AOV and moderate to low margin, categories like Food, obviously needs to go to, you know, general trade or premium general trade quickly. Now, as far as brands like Beardo, Just Herbs is concerned, obviously the focus should be to take some of the SKUs to, you know, GT. Just because I have money to throw and I take big display units in the outlet, doesn't necessarily mean generating an offtake in GT. That might give you one-time sale, but it doesn't necessarily give you long-term repeat offtake. So I think our approach has been methodical, and I think the first step would be to get into, you know, maybe premium cosmetic and this one. We already have Beardo some contribution coming from GT, Just Herbs minimal, but Beardo already we are experimenting a little bit. And yes, I think there are two sources of competitive advantage. One is obviously the existing, you know, access to GT, but more than anything else, also the fact that we now have scale in digital brands, which means there could be sharing of resources, sharing of costs, sharing of best practices, and obviously, you know, the first-party data which we have, which we have not yet harvested. So those are the. So I would say it's a composite thing and not just GT. Very clear. Is it fair to say that you've already done the groundwork in terms of... For example, when I think about, you know, you have put ink on paper, you know, actually giving a guidance, you know, is it fair to say that you have actually identified which brands, geographies, outlets, SKUs, so you do have fair amount of clarity, you know, on the execution? Now, obviously, you have to just execute. So is it fair to assume that way on D2C? So again, as I said, that we will do a lot of test and learn. It's we don't, unlike, say, a Project SETU, which is a very, very proven concept, which is you expand outlets, you expand distribution, it gives reach. As far as GT and this one is concerned, it's going to be a series of test and learns, you know? For example, sometimes it surprises you, like, you know, a certain category or a subcategory starts flying. Like, I'll give you an example of it. One of the D2C brands I'm not naming, we are seeing huge traction on quick commerce. Now, we didn't realize that we'll have some... But then later we realized, yes, it's an emergency top-up or an impulse, it can work. So I think we are doing a series of test and learns, and therefore, to say that we have a extremely cookie-cutter approach, that this is going to happen, we are going to do a series of experiments and maybe over the. And also, for example, in Beardo, we are checking out the salon channel. That's an alternate channel, and we should be open to tomorrow also, you know, looking at inorganic opportunities hypothetically in that, you know. So we are looking at a series of this. We believe that, as I said, that one of our stated intent is while we will continue to grow the core, over the next three to five years, we will ensure that, you know, that the diversification or decommoditization of the business keeps on rapidly happening. And in those, in those areas, we will do some experiment. Now, how much will be the percentage of GT? Very difficult to say, but all I can say is that in Food, it will be far more accelerated, you know, than personal care. Because in personal care, we believe by just mere presence in OT and bringing it to modern trade itself is a huge opportunity. And as you know, the other interesting thing is that even 2,000 top cosmetic stores contribute a significant portion of beauty in this country. Very clear. Thank you, and all the best on this. And one last thing, if I may. I'm not sure it's relevant for a quarterly call, but, you know, it's a platform to engage. Look, I still get portfolio manager questions on, you know, let's say, if hair oil is a sunset category. I understand that this has been discussed many times in the past, particularly during down cycles in general for FMCG. You know, and historically, you have helped us with, you know, some quantitative information in terms of recruitment rates, lapse rates, you know, performance of different segments of hair oil versus, let's say, some other personal care segments, particularly in the BOP, et cetera. Could you just help us with some statistics to kind of, let's say, continue to assume that it's not a sunset category as it is perceived to be? Thank you. Manoj, it's a 45-minute presentation. I'm happy to do it. All I can assure you that I have, I mean, we have a readymade deck for you. I can take you through it. But all I can assure you is this, that if you look at it, trend of VAHO growth has largely, you know, the category has largely trended BPC. So there is no difference in some of the, this one category. In fact, it's been now 20 years, you know, since I joined the organization, there was a note that the category is dying even in 2004. Yeah. Yeah, yeah. No, I agree. Okay, got it. I will probably connect with Pawan and team separately. Yeah, absolutely, absolutely happy to take. And let me tell you the other interesting thing we are seeing, and that in international markets also there is a trend, like, we are seeing good traction in, you know, some of the Western markets also. I believe the more people damage their hair, the more people do a lot of treatment, you know, this practice will be relevant and come back. And if you look at it, today, you—I look at this practice of this category just like yoga, having a turmeric latte. So it's, I think, Indian, and we are today, and if you look at the today's youngsters, are far more proud of Indian music, Indian traditions, than perhaps the earlier generations who were just looking up to West for everything. Also, if I may add, Manoj, the three important consumer metrics that we keep a track on, which is, the penetration, the frequency of usage, and the consumption per usage. On all these three parameters, we draw a lot of confidence looking at the numbers. There could be a little bit of sluggishness in the top SEC A, but that's not something where, which is a matter of concern. In fact, they're only moving to some better formats, where also we are present. So purely on consumer metrics, we have a huge amount of comfort. And as, as Saugata mentioned, we can always have a much longer discussion in terms of to take you through as to what are the, you know, broader trends in, hair oiling. But purely from a consumer metrics standpoint, we are absolutely comfortable. See, the other thing I want to add, sometimes what happens is that, you know, when the category growths are presented, you know, when you add up the category growths of the organized players, in some of our categories, what gets missed perhaps is the growth at the top end and the growth of the small brand or unbranded, and especially during inflation. So you have to add that to see. For example, last year, before, of course, you know, we believe that, you know, people have moved because of in a lot of categories to smaller brands because of inflation pressure. Similarly, at the top end, you know, people have moved to digital brands. Now, they don't get captured when you add all the volume growths of the large player pairs, and then you get a feeling that the category is slowing down. Sure, sure, sure. Thank you so much. I'll step back and thank you. Good luck. Thanks. Thank you. The next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Yeah, hi, thanks for the opportunity. Saugata, just wanted to understand the genesis of the project of expansion, distribution expansion. Because in recent past, whoever has kind of gone this path, it has not resulted in kind of numeric expansion, at least in terms of sales expansion, sales growth. So just wanted to know how should we think about that, this as a growth driver, or this is a quality of distribution driver, or this is a margin driver going forward? I think it's both a growth and a quality of distribution cover driver, both adds to that. See, I perhaps would beg to disagree, because there are at least two or three players, peers in our sector, who have significantly added distribution and distribution-led growth. That has resulted in growth. Some of the outperformance, if you see in, volume growth or top line in the sector in the last five to seven years, two or three players that stand out, have all been through direct distribution increase. Hmm. So today, when we analyze our own data, numerically 16% of our distribution is total reach is actually direct. So should we assume that a large part of our revenue is actually coming from direct? Or how should we think about over-indexation of that number versus our current revenue, current revenue base? Actually, what happens, I too, I think I covered, just like before. See, what happens is that usually your leader brands or dominant brands, like, say, a Parachute in the South and West, and Shanti Amla or a Nihar in East, they will get anyway indirect distribution. Because, as I said, that the indirect distribution channel likes to have a minimum amount of SKUs with tremendous high velocity. Now, when you get into challenger brands, or if I want to get into new categories in value-added hair oil or some of the other categories which I want to do for diversification of the portfolio, direct reach and retailing is far more important. The other thing that happens is that we believe for the general trade, as I said, that ultimately general trade and the sustenance of general trade and profitable sustain of general trade is going to happen when you expand far more in rural. Because obviously in urban there is a significant competition with OT. And for large scale manufacturer like us, who has categories which have significant penetration in rural... I think just to give you an example, Parachute, for example, still has a 12% to 13% gap between rural market share and urban market share. Now, if I really start driving distribution and direct reach, and today the other thing that happens is that if for brands like Parachute, Nihar and all... If I don't do direct distribution, we have data to prove that, well, the, you know, the vulnerability to counterfeiting is also extremely high, because I have brand awareness, but not brand availability. So I think a combination of all that, and I, the reason we are doing it is because we believe our direct to indirect ratio of 5.5 is extremely high, the indirect to direct ratio. The average, this one of our peers is slightly lower, and that has also happened because in the last three years we didn't do much in expanding distribution. And as I know that in the last two, three years, we have taken tremendous strides in our cost management initiatives, driving analytics-based spend models. And therefore, today we are very confident that the effort in terms of people, effort in terms of resources, is available to do that in a very, very focused sort of a way. In fact, there is, as we speak, a dedicated team of senior, this one actually driving this initiative. Got it. Very clear. Thanks, and all the best. Thank you. The next question is from the line of Akshen Thakkar from Fidelity. Please go ahead. Hi, team. Congratulations on very good set of numbers. Just a couple of questions from my side. One was just double-clicking on your commentary around profit growth for next year. I think till last quarter we were calling out low-teens growth, and, you know, while you've not called it out, it did sound like you're talking about low double-digit growth here. So just wanted to understand if that interpretation is correct, and if so, is Project SETU or investments that you're making there or elsewhere in the business causing this sort of lower? And, you know, we're all for good investments to be made. So no problem over there. Just wanted to be clear on where the difference is coming from versus the previous commentary. So there's no difference, Akshen. Is, we definitely will strive for low-teen profit growth, but there are multiple, you know, moving parts at this point in time. For example, if you look at, we don't know as to how the inflation will play out in key commodities or how will geopolitical scenario pan out, which will have impact on crude prices and its derivatives and the corresponding impact on the pricing on portfolio. So first of all, margin percentage, we are still saying that we will try and hold. Now, depending on what is the kind of revenue growth, we definitely will deliver, you know, healthy profit growth. So low double digit is something definitely which we believe will definitely happen, but we'll definitely strive for, low-teen growth as well. So there is no change per se in terms of what we've said earlier. Got it. So we should take it as a bound that you try to keep it within that range? Yes. We should read it only as volatility in raw material and not that incremental investments in Project SETU or something else which is- Project SETU, as Saugata clarified, that it is self-funded. So there are multiple, you know, we, we spend about INR 300 crore-INR 400 crore in various channel spends. And, while Saugata has said that we'll spend about INR 80 crore-INR 100 crore in the first year, the investments could be about INR 20 crore-INR 25 crore. And taking out that INR 20 crore-INR 25 crore out of a spend of INR 300 crore-INR 400 crore is not something which is, a very difficult task. There are a lot of inefficiencies which we can, weed out, and therefore we'll reallocate the resources. So this Project SETU will not have any impact on the profitability process. Sure. Yeah. Just to clarify, that INR 80 crore-INR 100 crore is over a three-year period, yeah? It's not one year. Yeah, yeah. Of course. Of course, of course. Secondly, just wanted to leave you with a comment on really welcome the disclosures on gross margins for Food and, and whatever the EBITDA margin targets for digital-f irst brands, et cetera, are. I think that just helps us understand margin drivers on your business a lot better from these levels. Otherwise, we come to think of 20%-21% as historically peaks, but as I think you've called out well, that some of these drivers continue to, you know, to help margins. Look forward to more disclosures around some of these businesses which are becoming as a part of your business. One very last housekeeping question from my side. On other income, there is a sharp dip this quarter. Is there anything one-time that we should be thinking about in this quarter? Akshen, I think it's better to look at full year number rather than quarter four, because of some one-time sitting in the base. So at a consolidated level, at a full year level, if we have to look at like to like, it is increased by about 10%. Specifically for the quarter, of course, it has one-off, if you remember, had a one-time gain. Because of a one-time gain on sale of land in one of our units, so which is about approximately 3 crore. Yeah. Apart from that, also, this quarter, we have a lower investment income due to higher dividend payout. Additionally, what we've also done is there is an FX revaluation hit due to currency depreciation in Egypt and MENA. So these are some of the one-off items in the quarter four, which is distorting the picture, and therefore it is better to look at full year, which is about like to like, about 10%. Sure. Perfect. Great. Thank you so much, and all the best for the rest. Yeah. Thank you. Thank you. The next question is from Mihir Shah, from Nomura. Please go ahead. Hi, team. Thank you for taking my question. You know, two question on VAHO. If you can again, you know, try and, try and help us understand the 7% decline was largely because of high base volumes, or is there a price correction that was taken? I'm sorry if I'm asking again, I missed out on that part. Is it a price cut in VAHO that we have implemented, and or this is largely volumes have contracted meaningfully? So, I will just give you a construct. We have done relatively better in the mid and the premium segments. There has been a little bit of a bottom of pyramid, which is the impact, and it's a combination of not price, but shrinkflation, as I said, and it's a combination of shrinkflation and some obviously volume impact. But the good thing is that, since last quarter, we have started doing much better in the... And our focus will be also in that. As you know that if I had to, you know, do a cut between low RPI and high RPI. As the RPI moves, our market share progressively reduces, therefore, there is a huge market share pool which is sitting there. And you will see during the year some more concerted action on our part to get that market share. Got it. Oh, so thank you for that clarification, because I was just wondering if it's pricing less, then it'll drag through for the remaining part of the FY 2025. No, but just to also, I think I've mentioned this, that shrinkflation anniversarization is also happening as we speak. Right. Right. Got that, Saugata. Thank you for that. You know, one more question on margins, actually. I'm just trying to understand the waterfall on the margin, because Saffola, which was a low-margin segment for you, Saffola edible oils, you know, was kind of in a very massive decline phase, which is coming back to growth phase, and hence can ideally add on to the pressure. VAHO probably, yes, there is some, you know, anniversarizing that is happening, but again, the contribution will be lower. The positive swings will come from your new portfolio or the growth, growth portfolio. But add on to, you know, the project... I mean, add on to, you know. So will it, will the margins, if you have to hold on to the margin, will it be at the cost of ad spends or, or there is sufficient room for that to, you know, get, you know, investments behind the growth brands can be done, you know, with the kind of margin swings that we are expected to see? So as I explained earlier, you know, margin swings will basically come from three, four things. One is, as I said, Foods, there has been a margin expansion current year, and current year also initiatives were identified during the year, so there will be benefit next year also. Plus, digital business, we have moved significantly this year, and there is a plan to move positive EBITDA in the next year. So that will all aid the overall, margins. And similarly, if you look at, VAHO performance has not been, the best, and if we are able to drive better VAHO and a better mix, so that will also help improve the margins. Again, at the cost of repetition, I just want to clarify that, SETU is not going to impact the profitability. It will be self-funded. As I mentioned that there are multiple resources, we'll do a reallocation of resources, so that will not have any impact on the profitability. Margin percentage guidance, as I said, it is more about we'll try to hold the margin, but we'll be striving for healthy profit growth. Got it, Pawan. Thank you, and wishing you all the best. Thank you. Thank you. The next question is from the line of Kartik Chellappa from Indus Capital Advisors. Please go ahead. Yeah, thank you for the opportunity. I have two questions. First is on your direct distribution expansion of the additional 500,000 outlets. Can you talk about predominantly which states will see this expansion? No, we don't want to get into details, but as I said that, certain parts of the country we are traditionally been weak, where maybe, you know, our competition is perhaps relatively stronger. And as we, you know, and which means that other than our top brand, the second or the third brand, weighted distribution is weak because we don't do direct distribution. So it is, we have obviously, it's not an all India thing. We have selected certain things, we'll go in a phased manner. And, yeah, it's a three-year kind of effort, so we will take couple of states, then next, you know, six months, we'll take a couple of states. Obviously, right now we have started the test and learn. So it's very, very state... In fact, within a state also, subregion and subcluster focused. And we have, as a result, also done our sales structure, revamped our sales structure, so that, you know, it also, you know, just the way, you know, the cluster kind of an approach, which is there in our sales system now. Some of the other peer companies have also done it. We, that approach is right there. So it's similar to Winning in Many Indias, if I call it. Got it. The second question is, as far as the gross margin expansion in Food is concerned, of 800 basis points, what portion of this will be, let's say, cyclical, simply because of moderate inflation, and what portion do you think will actually be structural? No, Kartik, in fact, most of the expansion is actually more structural in nature, and let me give you a bit of a color on that. So I think, first of all, we have improved the relative price index for some of our products in relation to the competition. So that's quite prominent. We've also moved to in-house manufacturing from 3P operations for one of our key product portfolio, which has helped improve the gross margin. Thirdly, we've also reconfigured our supply chain footprint to move closer to the marketplace, that will optimize the supply chain and logistic cost. And also now with honey and soya gaining scale, we are getting scale advantages in procurement. Yes, some part of it is also driven by gains in commodity, but a large part of it were due to all the structural reasons that I spoke about. Got it. Just one housekeeping question. If I look at the others, under other expenses of INR 321 crore, I think this is the first time where in a particular quarter it has crossed INR 300-odd crore. What would be the key expense items which saw this rise? Anything specific to call out there? There will be one. Some of the inorganic element of the acquisition that we have done, which is Plix. So if you exclude that, then your growth will be in line with what would be the in line with the volume and revenue growth. Got it. Thank you very much, team, for this clarification. Wish you all the very best. That's all from my side. Thank you. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments. Thanks for listening in on the call. To conclude, the year has ended on a positive note, with both the domestic and international business headed in the right direction. We expect an improving trend in domestic volumes through the substantial initiatives being taken to bolster growth in the core categories and sustain thrust on diversification. We also expect to continue strong momentum in the international business while expanding growth levers of the business. With pricing and currency headwinds largely in the base and commodities exhibiting an upward bias, the pricing cycle has turned positive. Owing to the above, we believe we have set the stage to deliver double-digit revenue growth FY 2025, and we aim to deliver a healthy earnings growth in the coming year. If you have any further queries, please feel free to reach out to our IR team, and they'll be happy to address. Thank you, and have a great evening. Thank you very much. On behalf of Marico Limited, that concludes this conference.