Good day, welcome to Tata Consumer Products Limited Q1 FY 2024 results conference call, hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon from ICICI Securities. Thank you, over to you, sir. Hi, everyone. It's a super good morning, good afternoon, good evening, depending on the part of the world you are joining this call from. Representing ICICI, it's our absolute pleasure to host once again the results conference call of Tata Consumer. The management, I hand over to Nidhi, you know, from the management for the intros and further proceedings, please. Thank you. Thanks so much, Manoj, for hosting us. Hi, welcome everyone to the Q1 FY 2024 call of Tata Consumer Products. I have in the room with me Sunil D'Souza, Managing Director and CEO, L. Krishnakumar, Executive Director and Group CFO, and Ajit Krishnakumar, COO. As we normally do, what we'll do is, Sunil will spend about 15 minutes talking about some of the key highlights of the quarter, and then we will get straight into Q&A. You can submit your questions on the webcast, or you can come to the Q&A line. I would also like to draw your attention to the disclaimer statement that is on your screens right now. With that, I will hand it over to Sunil. Thanks, Nidhi. If you go down straight to the executive summary, we had another strong quarter with double-digit growth of 11% in constant currency, reported 12%. Strong growth in the India business. EBITDA grew 19%. India beverages up 10%, with the volumes, continuing growth at 3%. Nourish quite a strong quarter with 60% revenue growth. Foods, volumes up 6%, overall top line up 24%. Tata Sampann, another strong quarter, growing 51%. International business grew 7% in revenue terms, -4%, actually, if you exclude exclusions, which is primarily South African, little bit of Bangladesh. EBIT growth of 11%. Tata Starbucks continued their store opening, opened 16 new stores, and now they are in 4 more cities. Topline grew 21%. India growth businesses all combined, which is ready to drink, NourishCo, Soulfull and Sampann grew 58%, and from 15% contribution are now up to 20. Volume share, market share in tea, when you look at MAT, it is slightly lower, which is 50 bps on volume, but broadly stable, same quarter last year, and we do think it is starting to turn. Tata Salt franchise gained share by about 10 bps overall, but because we have taken aggressive pricing across the portfolio, some of the lower down brands in the portfolio, we slipped a slight bit of share, and total salt share was down by about 20 bps. EBITDA margin expanded by 80 bps, led by improvement both India and international. We continued to invest behind our brands with A&P to sales for our India business at 7.1. Just to put it in perspective, it was 6.6% in the same quarter last year. Another busy quarter in terms of new launches. We had said our medium-term aspiration was to hit 5%. The good and bad news is we've hit it in this quarter. Big numbers from Soulfull, where we launched 3 new products in direct distributors in all 50,000-plus population areas and substantial number of 20,000-plus, and we remain committed to that. We had made a commitment of hitting 4 million outlets on numeric reach, 3 years back, and the target was September 2023. We are right now at 3.9%. In terms of performance, India beverages, volume 3%, revenue 10%. India foods, volume 6%, out of which salt is 5%, and revenue 24%. U.S. coffee and international tea, just to give you a perspective of the rapid price increases and therefore an impact on overall industry and volume, and therefore, U.S. coffee -12 on volume, but constant currency -5, overall revenue 2%. While volume was -6, again, with the coffee prices having gone up, revenue growth was +13, consolidated revenue growth of 12%. Overall, if you look at it, revenue 12%, EBITDA 19%, PBT 23%, group net 22%, group net profit was 16%, EPS growth of 23%, and we have INR 2,300 crores of cash compared to about INR 1,900 crores in the same quarter last year. Strategic priorities, the 6 pillars remain the same. I already talked about the distribution and our alternate channels, which is modern trade and e-commerce, continue to fire. 22% growth in modern trade. Just as a perspective, we've grown in modern trade at 1.7x the category growth in our top 4 customers. E-commerce up by 28% versus last year, continuing to do very well. I already mentioned 6.6%-7.1% is the moment of A&P to sales, and we remain committed to fueling our brands. I already mentioned the number moment on tea and salt market shares. Soulfull, all our new launches, which I talked about, are on the page. We also launched Cold Coffee, albeit in a very measured manner, just to make sure that we've got everything right in the marketing mix before rolling it out, and we've had a very good response. We've also launched Tata Spring Alive as a affordable mineral water, which will be sourced from multiple sources and launched across the country. Right now, we're piloting it up north. 1868 saw a range of flavors. More importantly, it was only loose tea earlier. Now we've launched pyramid tea bags. We've launched a range of mainline mixes in Tata Sampann, expanded into Dalia up north. We had launched Hing in the north, which was off to a good start. As we rolled it out, we figured the south Hing is slightly different, and we've tweaked it, and now this is again off to a good start, and expanded the range with international flavors in our Tata Sampann Yumside ready-to-eat portfolio. 58% growth in our new engines, which is Sampann, NourishCo, Soulfull, and Yumside. As a result of which, we've already hit 20% contribution from these businesses to the total India business. Next slide. Sustainability remains a focus for us. We've already reported our BRSR in our integrated annual report, completed third-party verification for our Scope 1 and Scope 2. We were recognized as the top 5 most sustainable companies in BW Businessworld's annual ranking. Next slide. In terms of macros, tea, as you'll see, Kenyan tea is running a bit soft because of subdued demand from, especially from Pakistan and Egypt. Indian tea, in line with seasonality, prices, coming up in Q1, but broadly lower than where they were during the same quarter last year. Coffee, on the right-hand side, while you will see Arabica prices moving up, I think they are starting to turn right now. I wouldn't read too much into the tea up, sorry, coffee upward movement because we are seeing some signs of softening coming up, given that the prices have run up for a long time. Overall, while you'll see growth in all our categories across markets, I would just like to point out this is all price related primarily and not as much volume related. In terms of business, India packaged beverages, volume up 3%, revenue up 2%. A full year CAGR, if you look at it, we've got a 7%, which is broadly what we've been saying about mid to high single-digit volume and a couple of points on top of that with price mix. Sorry, just to point out, coffee grew by 21%, so that part of the portfolio seems to be doing well. In terms of India foods, 6% volume growth. Salt grew 5%, salt revenue grew 18%. Overall, foods revenue was up 24%. Marginal movement in market share. NourishCo, I think, had a good quarter. Overall, close to a INR 300 crores revenue growing 60%. Gluco+, and Tata Copper+, which are the bulk of the volume there, both registering good growths. Overall, 11% profitability has been improved by higher realization as well as lower costs. Tata Starbucks opened 16 new stores. Now we are in 75 cities. International operations, UK, revenue growth of 1%. Good news is we're gaining market share with improved execution and the relaunch of Tetley, which I'll talk about shortly. Sustainable packaging, sustainable teabags, and cost restructuring, because of which U.K. EBIT is now in the double-digit area. The U.S. coffee revenue growth, -5%, tea revenue growth, -3%. Minor movements on shares, broadly in the same ballpark. Canada, while we continue to maintain market share, overall softness in the industry has meant revenue growth of -7% overall, and speciality, -13%. I talked about Tetley's transformation, we've got a better product with an improved blend. We have spent on upgrading the facility and the entire recyclable box, plant-based tea bags, no plastic outers, and a lower footprint, which means a lower carbon footprint. Financials, LK? Yeah, thanks, Sunil, and morning, everyone. Just walk you through a few slides on the financial performance. Starting with standalone performance, you see revenue up by 12% and EBITDA growth, more than proportionate 15% with an improving margin. The revenue growth has come about 2%, as we've seen earlier, in tea, 18% in salt, and about 50% growth in Sampann. These are the contributors to growth on the standalone result. Moving on to consolidated, revenues are up by 12%, 11% in constant currency. In the consolidated, you have international business, which grew 3%, including acquisition, and also you have the growth of NourishCo and Soulfull, which also grew by over 50% each. The non-branded business had a good quarter, grew by 5%, driven largely by price increases. Margins, we've seen an increase of 19% compared to a revenue growth of 12%, an improvement driven by both the price increases we have taken in different parts of the business compared to the same period in the previous year, and also strong cost initiatives and restructuring, especially in the international business. If you move on to the next slide on standalone and consolidated, just the shape of the P&L. We are seeing revenue up by 12% in the standalone accounts, an improvement in EBITDA margins from 14.8% to 15.4%, and PAT up by 23%. In the consolidated results, we're seeing a 12% growth in revenue and an improvement in EBITDA margin by 0.8%. If you look at the semi-results, you'll see that though material cost is marginally higher, we've optimized fixed costs and other expenses. We're seeing a slightly improved growth margin as well as an overall improvement in EBITDA percentage. Moving on to PAT INR 359 growth versus INR 277 growth, an increase of 30%. Group net profit after share of JV and associates, lower at 22%. There is a loss compared to a flat number in the same period previous year because of a loss in the North India plantation, arising out of weather conditions, lower crop, and an element of lower realization as well. That's the overall performance. Moving on to the segment-wise breakup of results. The first observation I want to make is all parts of the business have done well. If you take India business, segment results up by 20%, international 11%, non-branded 27%. Overall, all segments have delivered well in terms of reported top line as well as profit line, profit. International business profitability has improved, as Sunil mentioned, as we restructure, take out costs, and UK also did well this quarter in terms of share gain. If you look at the proportion of revenue and EBIT, more or less sustained, 75% India business, in terms of revenue, share, and a similar number, in terms of profit. International business, 25% and 26%. Underlying trend of improved EBIT, EBITDA in the international business, mainly driven by costs. In the international business, however, I should mention that volumes have been soft, and there has been an element of small share loss in the coffee business. We expect that we will, you know, come back, and overall market growth will improve in the coming quarters. That's it from my side, and over to Sunil for the concluding remarks. If I were to walk you through, we similar to last quarter, we continue to see improving trend, demand trends for our core categories. Remain cautiously optimistic, while rural has started to come back, while the north has started to come back, I'm keeping my fingers crossed because two reasons: A, it's still not pre-COVID trends, and it's dependent on what happens with the whole monsoon/El Niño effects. Global inflation has started to plateau. I think we are more or less done with pricing, a little bit, small bits here and there on pricing left to tackle, category demand trends in our key international markets, especially on the volume front, are going to be key monitorables. Q1 2024, we delivered in line with our commitment, double-digit top line with EBITDA margin expansion. Interventions we put in for our tea business have started yielding results, overall growth is still below our medium-term aspirations. As we had said, we expect to see mid to high single digit volume growth and a couple of points on price mix. We're still not there yet. Salt business, just to remind everyone, we took a 33% price increase in about 15 months. Despite that, we've seen a 5% volume growth, which is good. Going forward, given the fact that there is not going to be too much pricing, I think growth is going to be driven by volumes and premiumization. Growth businesses have been delivering well, up to 20% of our portfolio now. I think the standout is NourishCo, which has continued performing despite adverse weather conditions. Tata Starbucks recorded a strong quarter and now 348 stores. In the international business, pricing actions and structural interventions have led to sequential improvements in margin for three quarters now. Broadly, they are in the ballpark of the India business, we need to continue to improve from here. Demand softness needs to be an area to watch. We are in the middle of an NCLT process, in the final stages. We do expect approvals to come through soon. As soon as that happens, we remain committed to completing the integration very quickly, hopefully this financial year. EBITDA margins continue to improve despite continuing investments in new business and despite powering brands with A&P and spending on distribution expansion. Going forward, we will continue to stay focused on driving profitable growth, balancing top line and margins. Yeah, back to you, Nidhi. Thanks. Thanks, Sunil. Okay, moderator, we can go to the Q&A please. Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants connected over the webcast, you may type your question in the text box below the media player. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Abneesh Roy from Nuvama. Please go ahead. Yeah, thanks, and congrats on good numbers. My first question is on Tata Soulfull. Versus when you acquired and now, what would be the market share movement in the core business? In the breakfast cereals, how is the market share improvement, given you'd have scaled up much higher distribution and much higher advertising? The new products in Tata Soulfull, essentially, if you could talk about masala oats, how was the performance this quarter? What is the thought process on Nutri Drinks Plus and NutriDrink Plus for the adults also? Are you going to target the Horlicks market? Because that has been a very tough category, and that faces also the milk usage and inflation issue. Will this product be able to overcome that? Thanks, Avnish. Just to give you the investment thesis in Soulfull, strong brand, good products, strong team, needed to be fueled with distribution and marketing dollars. I think that thesis has borne out. Last year, Soulfull doubled in revenue, and again, this quarter, we've had north of, I think, 50%-55% growth, so very strong growth. In terms of market share itself, significant improvement from where we started, but I would say we're in the mid to high single digit range right now in overall cereals category. Masala oats, actually, we have crossed, I think I would say, strong double-digit market share in, especially in places where we are present. I would measure, say, in modern trade, we are at a very, very decent double-digit market share number. In specific geographies where traditional trade has executed, again, very, very strong market share numbers. We still continue to expand the availability there. Last point is, in many of the categories that Soulfull will enter, we will not be category creators, just as a perspective. Where there are large categories, I can bring a differentiated brand to play and connect with the consumer with a great product. There is no reason why I should not. That's the reason, for example, you'll see NutriDrink. As we speak, 6 hours, we will be shipping out one more category. Every category that Soulfull is entering, we are seeing good traction. More importantly, the Soulfull margin is also accretive to our total portfolio. I think we've done a very good job on owning the millets', branding, the kids' portfolio doing very well, all new launches. So far so good. I think we're on a good track. Right. Just one small follow-up there. You grew 2x last year, and, this year, also 50% growth in Soulfull. Mid to high single digit market share, that seems to be a bit lower versus the kind of expansion you have done. So absolutely, Avnish. I mean, just like our overall business, our core has to do very well, and then the expansions have to fire, right? The whole equity. I wanted to understand here, how you're seeing this entire 20% of the portfolio, India portfolio, in terms of profitability metrics. Is there a good movement or still because new products are getting launched at an overall this 20% level, the EBITDA margins, et cetera, may not have had a significant improvement, still saying that the price hike will not happen, but you have not spoken on the price cut? Second, of course, will be on the market share loss at the lower end, would you be worried? Because in tea, we have seen earlier, and we have also seen wherever sharp price hike happened and then deflation happened, regional players are coming back. As much of a price uplift in our portfolio. Right now, what we are seeing is broadly flat to slightly marginal downtrend on tea. I would say right now, we are braced for a flattish versus last year sort of number, maybe slightly below. Prices we had thought will come down, we had not expected this heatwave in the north in April and May, which held up the tea prices. If all things remain constant, tea, we would start to see it coming down, which we have not till now, okay? Therefore, broadly, we are playing in a flat. On the salt question itself, I wouldn't be too worried, simply because I know I've taken a 33% price increase. The local players which play even at a lower quality, there might have been a bit of swing, but I do think I have the ability to recover it very quickly once price is stabilized, which is what we are seeing now. Thank you, Mr. Roy. May I request you to join the queue for any follow-ups? Before we take the next question, I'd like to remind our participants to please limit your question to two per participant. If time permits, you may join the queue for any follow-ups. The next question is from the line of Naman Shah from Mirae Asset. Please go ahead. Yeah. Hi, sir. My first question is on the NourishCo business. That's almost INR 300 crore this quarter. Can you discuss what's driving this growth and the kind of scale you expect for this business two to three years down the line? Namand, essentially, again, the hypothesis in the NourishCo business was that great differentiated products which could be scaled up significantly, both with geographic expansion and portfolio expansion. Both geography and portfolio expansion is at play. I would say we are broadly in about 75, 80% of the country in terms of production right now. Again, hypothesis being that we will not drive more than 150, 200 kilometers with these products, because we play at affordable price points, and therefore, freight is a very, very significant factor. We have expanded portfolio. We have expanded into jelly for Gluco+, juice and jelly. In PET, we've expanded into just like I said, we're expanding our mineral water play. Himalayan distribution and execution is off to a good start. Right now, where we closed last year at INR 300 crores, sorry, INR 600 crores, the target for this year is to hit a four-digit number. Could you talk about a few years down the line, what kind of scale you expect in this business? We do expect to see continued strong momentum in NourishCo. Again, I will say driven by geography and portfolio. Sure. Sir, my second question, slightly, I just wanted to understand the quick commerce channel a little better, and wanted to hear your thoughts on this channel. How do you see this channel becoming sizable a few years down the line, and what's the contribution this has to our business currently? See, I am not a forecaster. All I can say is a lot of these trends you can see going up and down, just like many people were very, very bullish on the online space during COVID times, and you can see a lot of brands/businesses fading off in that space. All I can say is, on a long-term basis, consumers will move to convenience, consumers will move online, and therefore we remain committed to growing our total e-commerce business. Now, in that total e-commerce business, quick commerce has been on the upswing, I would say, in the last 6 to 12 months, so to speak, and we do see that building up. Now, ultimately, again, the cost economics ultimately have to be working for those channel specifics so that they can sustain and continue to grow. I wouldn't pass judgment on that piece. As long as the businesses continue to deliver their promise to consumers of quick this thing without a significant upcharge on the products itself, I think they have got a good proposition, and we remain committed to that. We are seeing strong growth in our e-commerce. I think 28% is what I alluded to. All I will say is quick commerce is growing stronger than the average, and we remain committed to making sure that we continue to grow there. Incidentally, on the online space, in the tea business, we are the market leaders. Sure, sir, that's helpful. Just one follow-up. How would the trade terms be in quick commerce, versus overall e-com or modern trade? I would say we are competitive, and that's why they make sure that, we are well positioned in that channel. The usual credit, and slightly higher margin that's offered to MT in e-com, that is largely the understanding for quick commerce as well? Just that bit. I would say we are competitive, in the channel in all trading terms, including discounts and credit, and that's why we continue to power ahead. Mr. Satyajeet, please join the queue for any follow-up, as we have several participants waiting for their turn. Thank you. The next question is from the line of Jitendra Arora from ICICI Prudential Life. Please go ahead. Hi, good afternoon. Just one quick question on NourishCo. That's a brand where we have also expanded our distribution reach significantly over the last couple of years. Just wanted to understand from you that, going forward, in terms of growth mix, how do you see that being driven by distribution versus, the product introduction slash innovation? Like I said, we're in about 80% of the country right now. We are still not present in large swaths of geography and large urban cities, for example, right? We've still yet to build up distribution completely in a Bombay, in a Bangalore or a Delhi. I mean, we are picking and choosing where we want to play, where we can get the fastest bang for the buck, if I may speak so. You're absolutely right. We've still got a long way to go on distribution, I would say in the near to medium term, we will complete the distribution gap, and then it will be a game of two things. A, is building out, I mean, strength in the outlet per se, and expanding portfolio. On both these things, we've got a healthy pipeline lined up, and therefore we remain confident of continuing to deliver strong numbers in NourishCo. Given that we are likely to hit four digit, this year, sir, as expected, or that's the aspiration, when do we expect to double this, in how many years do we expect to double this thereafter? All I can leave you with, even with the strong numbers, if you look at my market share, just for example, in the water category, we have not even hit mid-single digits. We've got a long, long runway. I just say that we remain very confident of delivering strong numbers in this business. Thank you. Thank you. The next question is from the line of Tejash Shah from Avendus Spark. Please go ahead. Hi. Hi, sir. Thanks for the opportunity. A couple of questions from my side. Sir, if we see both the top players in tea segment have delivered or indicated low single-digit growth over it, we have also created, why are we kind of not participating that aggressively as we would have expected? Tejas, I would presume the 7.9% you're referring to is the Nielsen growth number which was quoted. I just urge to remember two or three things about that. A, is Nielsen measures offtake from retail, but when we declare our numbers, it is primary sales from us. You have to remember, after the primary sales from us, there is distributor inventory, then there is retailer inventory, and then there is consumer offtake, right? I would not do a like-to-like period comparison, that's number 1. Number 2, you have to also realize Nielsen does a sampling-based indicator. I use Nielsen more from a trend, additionally, what I would pick up. Number three, to answer your question, there is a point below which the gross margins that you play with become very, I would say, razor thin and dangerous to tread, and especially in systems like ours, where we hold inventory for some time, whereas the loose and local players buy, pack, sell, right? There is no inventory cover, et cetera. It is a slightly dangerous territory to tread on those very low margin, segments. That said, just as a perspective, I think even in our report, we've disclosed saying that Tata Agni, which plays at the bottom of our portfolio, but over the longer term, I would say you should see market share inching up continuously. Is the question answered? Sure. Thank you. Hello? Yes. Yeah. Sir, second question pertains to NourishCo, you have always maintained that you prefer to solve growth and problem, profit problem statement, together and not separately. The kind of growth that we are seeing here, how should- Tejas, just like I said, I look at the contribution margins first, and then how does it flow through the total line. NourishCo is broadly in the ballpark of what we are on the contribution margin, gross margin, as we measure. Margin is inching up, fixed costs remaining the same, P&Ls are continuing to move up and therefore become EBITDA accretive. That's the way I would play it. Perfect. Thanks a lot. Thank you. Next question is from the line of Sumant Kumar. For NourishCo, how, where we are lagging, where we are going to have a more expansion, in which region? Also, how is the profitability scenario in next couple of years, considering we are again going to have a scale? As per my understanding, currently, we have a single digit, higher single digit, between margin in NourishCo. Sumanth, NourishCo, we started off when we inherited, it was primarily Andhra, Telangana, Orissa, and a little bit of Tamil Nadu. I would say right now we've built a very strong footprint in those geographies. Last year, we had expanded, or year before, end of year before, we had expanded to the east, per se, where we are still building out. Last year, we started moving to the north, this year, now we are slowly coming to the west and the rest of the south. That's where we are, that's why I said in footprint terms, we are probably around 75-80% of the geography, we would have built out strongly in about 25-30%. We would be still building out in 25, 30, and in about 25, we would just be starting off, having put in the manufacturing and distribution in place. I'm not sure when you refer to single-digit margin. As I said, in the contributory margin, gross margin level, as we measure, they are in the ballpark of total TCPL. Last quarter was a good quarter, you have to remember, NourishCo is a seasonal business. We do expect them coming close to profitability on a fully loaded P&L by the end of this year. Okay. can you talk about the tier two, tier three category, cities, penetration of NourishCo, and how are we planning to penetrate more in this, in these cities? As I said, as we expanded, we've left out large part of metro geographies, et cetera, because that is normally the more expensive distribution to tackle and more difficult distribution to tackle because everyone is playing there. Our hypothesis is we will not drive for more than 150-200 kilometers with our products, because that is when freight comes into play. We have focused on very, very specific radiuses around the factories that we have put in. I would say, I don't think we are targeting a tier two, tier three sort of mix per se. We are targeting very specific geographies around the plants that we have set up, which are in line with the total footprint roadmap that we had drawn up. Thank you, Sunil. Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, Sunil. Again, I also want to ask on NourishCo. My understanding is that Bisleri, which is the largest player in this field, make conversion charges, our margins would probably settle around that 10-11% kind of mark. What is wrong in my thought process here? Essentially, not all of Bisleri's manufacturing is owned. They operate to a significant M.O., that's number 1. Number 2, we are not only Tata Copper+, we are also Tata Gluco+, which is significantly higher margin and product that we are and we are also Himalayan, and we are launching products which are significantly higher revenue, higher and beyond a point, I do think we can get to a very, very decent EBITDA%, which is in the ballpark of where TCPL is today. Okay, that's very helpful. I also wanted to ask regarding many players where many of them make close to a 20% EBITDA margin compared to pulses, where we are actually experimenting the business model. just wanted to understand where you are going more aggressive between pulses and spices, and I mean, correct me if I'm wrong, but I'm not seeing that kind of aggression in terms of spices from your side, which is actually more attractive business in my view. Percy, I have to make sure that my team demonstrates that we are showing higher aggression. Just as a perspective, it is not a or game, it is an and game that we're playing. We are focusing both on spices as well as pulses. There are some significant differences when you look. I mean, from a margin perspective, from an outside-in perspective, when you look at the numbers, you're absolutely right. The EBITDA margins in spices are significantly higher than pulses. You have to also remember that there is a difference, because pulses, we are the only national player offering products of quality consistently to consumers at a very decent price, and that's why we are off on a very good wicket, and we're seeing good growth there. The spices category is a very, very, very sticky category. While pure make a lower margin, blends make a higher margin, but blends are more sticky. Therefore, it takes time to move consumer habits. I use it because my grandmother used it, and my mother used it, and therefore, I will use it. The frequency of usage, frequency of purchase of blends is significantly lower than pure, and that's why you'll also see in my spices business, my pure contribution is higher than compared to the market, because pure, it is easier to bring in the consumer than blends. That's not to say that we are not focused on spices. Just for example, last year, we decided to enter the south. We had not tweaked our blends to play in the south, our products to play in the south. Whether it is pure or blends, south requires a different tweak. Just as a perspective, with continuing Hing, for example, we went in the north, we found good traction, but when we went to the south, again, we found that the south Hing is slightly different to the north. We've tweaked it, and now we are going behind it. Again, I'll repeat, it's a and not a or game, but these are two different playing fields, if you may. Sure, sure. Lastly, on tea, business, margins, would we be right in assuming that the India tea business margins in FY 2024 at a EBITDA level, should be, roughly the same as what you did in FY 2023? Percy, I think the big thing here is how do tea prices move and our ability to take that tea price to customer. Like I said, we had expected the tea crop in India till June quarter to be better than last year, unfortunately, in Assam, the heat wave, I think, played a bit of a spoiler, therefore, while prices are moved down, they have not moved down as quickly. If the trend continues, we do see a little bit of margin expansion happening on tea, again, I would take it. We're still not where they should be. I think there is a little bit of opportunity out there, I would take it one quarter at a time. Okay, thanks. That's all from me, Sunil. Thanks and all the best. Thank you. The next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead. There is a possibility of high inflation this year in pulses, is what we hear. How are you placed for this? Typically, in the past cycles, like in other categories, do you end up gaining market share or, having very high revenue growth with good volume growth when, you get into these kind of high inflation years? The good news is that we had very clearly focused on building a strong procurement engine for ourselves on the non-tea commodities, so to speak. Over the last about 12 months, I think we've started to get a few things right, whether it is the upcycle or the downcycle, which is happening in these commodities. Therefore, I see no reason to worry about. As commodity prices go up, so will we take up prices, and when they go down, we will also correct it. Overall, margins, again, the way we measure gross margins, contribution margins, they have gone up for Sampann overall, and we are spending money behind brand building for Sampann, which we had not for the past few years. We do expect volume and revenue growth to happen. Okay. My second question, Sunil, was on NourishCo's business model. Essentially, that in most consumer businesses, you have a gross margin when you're building it up, and then you have high ad spends, which there is operating leverage on. Just wanted to understand, in NourishCo, is the advertising spend angle much lesser, and it's more of feet on street and, you know, incremental distribution that you have to build, in which case, that variable cost will continue to go up as you ramp up the distribution? That's the first part, and the second part was within the geographies you are present, what would be your, like, distribution versus, let's say, the market share? ... distribution of water, or other beverages? A, overall, in the beverage business, availability matters first, and then it is physical availability is first and mental availability is second. And therefore, the focus is on building distribution. That said, after a point in time, you do have to build your brand very strongly, and we started doing it this year. This year for Gluco+, for example, we did our first national campaign. We've never advertised nationally. This year we did that, and I do think, the INR 300 crores partly is a result of that, number one. Number two, as we expand, both manufacturing and distribution, the costs are all variable, and therefore, they will go up and down as the volume goes up and down. That I wouldn't be too worried about. In terms of distribution per se, as I mentioned earlier, we've got a long way to go. Why? Because, as I said, I would say Copper+ is roughly, probably, maybe 40%, 35%, 40% of my portfolio, out of the INR 600 crores that we did last year. Despite that, we have still not hit mid-single digit market share. In outlets where we are present, outlets, specifically, our share among handlers is quite strong. We've got a still a long way to go to build distribution, and therefore, market share, and therefore, total business. Okay. Okay. Thanks so much, Sunil. That's it from my side. All the best. Thank you. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thanks for taking my question. Sunil, my first question was with respect to the incessant rains that are happening in most parts of the country, are we impacted in any way with respect to our supply chain? The incessant, the things you would hear about, I think in specific parts of the north per se. Yeah. Other than that, I don't think there has been significant disruption in terms of logistics, et cetera. Again, when I talk about Delhi, with all due respect, I think it's a few parts of Delhi which are making headlines. It's not across the city of Delhi. Yes, there are some issues specifically in Himachal, et cetera, but those are not as significant parts of my portfolio. Yeah, there have been those sporadic issues, but nothing that I would call out in terms of disruption. Understood. My second question was with respect to, you know, the, you know, the number you provide on the innovation side. It's very interesting to see how, you know, the share continues to rise. Just wanted a clarification. When you say 5% of the sales, if you could just share how this number could look like, when we just look at, you know, the India branded business, what the share would be? Effectively, when I say innovation to sales, we take products which are being launched in the last three years. Again, when I say product, changing a packaging, new graphics, new brand architecture, et cetera, doesn't qualify. It has to be distinctly new products, per se, or products which have been tweaked substantially. That's the number. When I do a benchmark with Indian food and beverage companies overall, about 4% to 5% is puts us in the top quartile, and that's why we had set a long-term target, medium to long-term target of hitting 5%. It's good that we've hit 5% in the Q1. I would say I'm just keeping my fingers crossed that we continue at this level going forward. Okay, understood. Third was, you know, with respect to the new innovation on water side, on Madesh. Let me put it this way. There are two distinct segments in water. One is bottled water, which is where Tata Copper+ plays. There is Bisleri, there is Kinley, there is Aquafina. Then there is mineral water, which is where Himalayan plays, and market share of Himalayan in that is significantly high, higher end. The reason we are constrained with Himalayan, because we have to source from our Himalayan mineral water. For example, even to sell it to Chennai, I have to drive it all the way from the Himalayas to Chennai. Mineral water sources across the country. Right now, it's a pilot being run up north to see how much incrementality does it get for us in volume terms beyond Himalayan. Once we read it perfectly, then we will be looking at expansion. Understood. And one final question, if I may ask, Sunil, and I'll borrow your own comment, which you made. My main game in Soulfull is breakfast cereals, and rest of them are adjacencies in the portfolio. Am I looking for phenomenal market share or to drive up significant size in any of the categories? No. I do know there are adjacent categories which are of decent size, where I can leverage the Soulfull portfolio and make a pretty fat market share. I think we'll make good money because we are spending on the Soulfull platform and the Soulfull brand. Understood. Thank you very much, Sunil. Moderator, since we are running out of time, we'll just take one more question from the queue, and then we'll go to Vepa. We are extending by another five, 10 minutes, if that's okay. Yeah? Noted. Profitability of this business, given that you'll be continuing, adding new products, categories, and innovations in this space, will it improve 100 to 200 basis point every year from where it is today? Or how should we think from a three-year view? Thanks. Number one is on a year-on-year basis, these businesses, while they are there for top line growth, as NourishCo, we have seen very clearly contribution/gross margins improving as we gather scale. Therefore, the total bottom line in those businesses, as long as I increase advertising marginally, compared to where I am today, because there is no other fixed cost getting added, as with price mix. The big top line growth drivers will continue to be the growth businesses. As of now, we've classified four businesses there, which is NourishCo, Soulfull, Sampann, and Tata Sampann Yumside. These businesses have both a distribution highway as well as a product portfolio highway to play in. At the same time. Question. There is a question from Kunal Vora. The question is: What synergies do we expect from integration of Tata Coffee? Yes, you want to take that? There are three areas which will get impacted, right? First is, we are integrating the extraction business, so positive impact on EPS going forward. We are staying with that, and we expect to exercise, the first part to be completed this year and the international leg to be completed either towards end of the year or going into next year. Thanks. The next question is from Bharat Sheth at Quest. Sunil, he's asking: What is our thought process- Simply because they bring a scale, they bring a profitability, they bring a brand, they bring a team, they bring a technology in spaces which will take us too long to build. As I have and we've distilled the entire food and beverage space, and sort of narrowed down the segments versus gross margin, competitive place. We've narrowed that down, and then we've laid down very, very clear financial guardrails within which we should operate. Yes, we've been evaluating a lot of opportunities per se, but if it doesn't fit strategic or financial parameters, then I would give it a pass. The only thing I would like to highlight is, I think in the inorganic space, while- I have the last question we'll take, which is from Tejas at Avendus Spark again. He's asking: We are right on track to achieving our distribution footprint target. Would you prefer to consolidate here for a while, or the aggressive expansion will continue? If yes, then would it be possible to share the new target? Tejas, I would say we will continue things through distribution, innovation, and marketing, and deliver top-notch financial results. That's what we will continue to be focused on. Okay. Thanks, Sunil. I think, we've run out of time. There might still be questions, though, so, you can get in touch with us if you have any questions. Yeah. With that, I would like to thank everyone on behalf of the management.