Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon from ICICI Securities. Thank you, and over to you, sir. Hi, everyone. A wonderful good evening to all of you. Representing ICICI Securities, as always, it's our absolute pleasure and privilege to host the management of Tata Consumer Products for the Results Conference Call. Over to Nidhi Verma from the management for further proceedings, please. Thank you. Thank you so much, Manoj, for hosting the call. Hi, welcome everyone to the Q1 FY 2025 call for Tata Consumer. As you would have seen, we've just announced our results this evening. For today's call, I'm accompanied by Mr. Sunil D'Souza, Managing Director and CEO, Mr. Ashish Goenka, Group CFO, Mr. Ajit Krishnakumar, Executive Director and COO. What you see on your screen is the safe harbor statement, so I want to draw your attention to that. Yeah, as you might be aware, we are in the middle of a rights issue, which we've recently announced, and the details of which are available in the letter of offer. Before we proceed, I just want to give you some context that, as per the statutory guidelines issued by the regulator regarding disclosures and external communications, we will not be able to share any forward-looking statements and also not disclose any further details on the proposed fundraise other than what is shared in the letter of offer. I request your cooperation to limit your questions related to Q1 FY 2025 performance. With that, I will now hand it over to Sunil. Thanks, Nidhi. So we announced our results today. Our consolidated revenue was 16% in quarter one. Organic growth was 10%. Two acquisitions contributed to 6% additional growth. During the quarter, India Beverages grew 6%, 1% of which was organic growth with flat tea volumes year-on-year. India Foods continued its strong trajectory with revenue up 30%, 14% of which was organic. Volume growth was 10%. International business recorded 10% revenue growth, 8% in constant currency, with EBIT growth of 46%, driven by previously executed structural cost items and by significant pricing. Now, just as a perspective, when we are talking about India Beverages, India Foods, and international, for purposes of this discussion, we are calculating for Capital Foods in India Foods, Organic India in India Beverages, because that is the way we manage the businesses on a day-to-day basis. Because the acquisitions were done with a substantial business in India, from a management perspective, it is easier for us to calculate it this way. So therefore, you will probably find a bit of discrepancy between the statutory numbers versus what you see on the management commentary. For example, in the statutory pieces, you would see all the sales done for Organic India in the U.S. calculated on the U.S. numbers, or Capital Foods done in the U.S. calculated there, whereas here we are collating it into India. So I just wanted to clarify this because I believe there have been some queries about why the mismatches. Now, growth businesses grew 20% organically. The ready-to-drink business was impacted by intense summer, and our ready-to-drink business is primarily an out-of-home single-serve business. It is not a take-home business, and that is why we saw the impact. Apart from that, there were some tactical pricing actions which were delayed during the quarter that also impacted the business. Now, profitability continued to improve at group level. So while our consolidated revenue has grown 16%, our consolidated EBITDA has grown at 23%, giving us a margin expansion of 80 bps to 15.4%. Integration of Capital Foods, including cleanup of the additional channel inventory that we talked about last quarter, is complete, and the run rate is trending as expected. Integration of Organic India is moving as per schedule. We had committed to complete it in 100 days, and we seem to be on track for that. Starbucks, in line with our plans, opened 17 new stores during the quarter, and therefore now we are totally at 438 stores at the end of quarter one. We announced the rights issue. We expect to close on 19th August, and as announced, we will use the proceeds to repay short-term debt financing raised for acquisitions. In terms of performance, India Beverages, which I repeat, if you see the logos underneath, includes Organic India there, grew by 6% and delivered INR 1,523 crores of revenue. India Foods was INR 1,346 crores of revenue with a growth of 30%, which includes Capital Foods. Excluding Capital Foods was a 14% growth for India Foods. India Beverages was a 1% growth. International constant currency growth of 10%-12% growth, including forex, and therefore total revenue growth of 10%. Non-Branded had a good quarter with a total revenue growth of 33%, all in INR 4,352 crores, organic growth of 10%, and total revenue growth of 16%. So INR 4,352 crores, 16% revenue growth, translating into 23% EBITDA growth at INR 671 crores, expansion of 80 basis points. PBT before exceptionals, just to draw your attention, PBT includes two items. One is amortization for the acquisitions, which was not there last year. And number two, the impact of using up all the cash that we had on books, as well as drawing up on bridge financing, which has resulted in interest costs for the quarter. And that's why PBT before exceptionals is negative at 6%, and group net profit before exceptionals is down by 11% versus last year at INR 302 crore. All in, net profit at INR 289 crore and net cash. So for the last two quarters, it's when you would have seen a reversal. We used to sit on a similar number, excepting in the positive territory. Right now, we are negative INR 2,857 crore, which the rights issue would help us to repay and therefore remediate. In terms of strategic priorities, in line with what we had already talked to you in Q4, we spent Q1 in adding feet on the street. In all 500,000 population towns, we have two salesmen going to market, one salesman carrying tea, Organic India, and Soulfull, and second salesman carrying salt, Sampann, and Capital Foods. Whereas in the still larger cities, which with a 1 million population and select 500,000+ population towns, primarily in the south of India, we have three different salesmen. The whole objective being, as over the years, from being a simple tea and salt company, we have grown into a larger food and beverage company. Our portfolio has got complex with multiple products, categories, and SKUs added. Therefore, to release bandwidth at the front end, we have separated out the categories so that the salesmen get more time to focus. Modern trade continued strong growth at 28%. E-commerce continued at 61%. In line with our announcements during the acquisitions itself of addressing the opportunities in the pharmacy channels and food service, we have initiated pilots in six cities for pharmacies and planned pilots in two cities in food service. We have invested behind our brands. Our A&P to sales ratio has been inching up, and you see it at 7.8% for the quarter. Our journey of innovation has now evolved into more breakthrough, more margin-accretive, bigger, better innovations. We launched Tata Salt Panchtatva, which is with added five vitamins and minerals. One of the single biggest consumer pain points in using millet atta that's ragi atta or jowar atta is the fact that you can't roll it like you roll wheat atta and. The R&D team has cracked the code on this one, and we've launched Easy Cook Ragi Atta, by which you can make rotis as easily as you can make with atta from wheat. We've also launched Millet Oats Plus Dal Shakti, which is giving a completely different texture and taste to the product. Our launches online with cold-pressed oils for Tata Simply Better have done very well. Therefore, we have added one more SKU to it of olive oil. We had committed last quarter when we finished the acquisitions that we will move our growth businesses from being 20% of the portfolio to 30% of the portfolio. We had also committed saying 20% of the portfolio was growing 30%, and that 30% will grow at 30%. Unfortunately, we've been a little bit short this quarter. Like I mentioned earlier, it is primarily to do with NourishCo. The base growth portfolio grew at 20%. But if I add, and this is mathematics, if I add Organic India and Capital Foods, it now shows 66%. We more or less completed our integration of Capital Foods, including announcing the new organization and reporting structures. And we are on track, as I mentioned, to complete Organic India in 100 days. Key commodities for the quarter. The only thing I would urge you to remember is that commodity prices in the quarter do not impact the quarter necessarily, could impact different quarters. Tea prices have been hovering between 15%-20% higher in North India because of the impact of drought and therefore the reduction in crop in North India. Similar story for South India, but the impact has not been as high. It's roughly around 10%. The good news on the other side is that prices have been largely benign for us in the Kenyan market. On coffee, they have been on a secular uptrend, whether it is Robusta or Arabica. Robusta prices are roughly 50% higher from where they were just about two quarters back. In terms of business performance, India packaged beverages impacted by a very heavy, very high heat and summer wave. Volume growth flat, revenue growth of negative 1%. Volumes are flat, category impacted by intense summer. Coffee, however, we continued to have a good run, albeit relatively smaller base, and we grew at 28%. We did have a few launches, including Tata Tea Chakra Gold Care, which was launched in Tamil Nadu. We did put A&M money behind, A&P money behind the brands. On foods, volume growth came in at 10%, organic revenue growth at 14%, but total, including Capital Foods, revenue growth at 30%. Salt revenue grew 9%, driven by 8% volume, which is probably one of the stronger volume growth that we've seen in some time. Value-added salts also grew 35% in line with our premiumization agenda. Sampann continued this strong trajectory, growing at 37%. Ready-to-drink, Copper+ did grow at 22%, but overall, we had softness on the Gluco+, which is a single-serve part of the portfolio. And therefore, revenue came in at only 7% and INR 311 crores for the quarter. Capital Foods, combined gross margin of 48.4% between Capital Foods and Organic India, which is accretive to the India portfolio. Organic India revenue came in at INR 71 crores, Capital Foods under INR 64 crores, which is more or less in line with what we expected. The identified synergy benefits, meanwhile, have started flowing in, and we can already see it in EBITDA margins for the quarter itself. Non-branded business, we had a very strong quarter of 34% revenue growth, primarily driven by very good coffee prices. Plantations also recorded growth of 34%. EBIT margin for the non-branded business probably hit a record, expanding 600 basis points. Starbucks opened 17 stores. Now it's present in 65 cities with 438 stores. Traffic was a bit of a challenge given the heat wave during the last quarter. U.K. continued its strong results, growing revenue 14%. U.S., while coffee revenue declined for tea revenue, grew by 8%. Canada continued its strong performance with 12% revenue growth and, more importantly, 17% growth in specialty tea as Canada continues to look to expand beyond everyday black. Financials, Ashish? Yeah. Thanks, Sunil. I think Sunil has largely covered the key financial highlights for the quarter. I'll just make a few key call-outs. One on the standalone results, the growth in revenue was 21% and EBITDA growth was 8%. Consolidated revenue, as Sunil mentioned earlier, grew at 16% and on an underlying basis, also 16%. We had a strong EBITDA growth, growing at 23%, and our margin expansion consequently was about 80 basis points. On the financials on a consolidated level, I think a couple of call-outs. One is on the depreciation and the amortization line. We would have seen a significant growth versus last year. Large part of this is contributed by the amortization charge that we are taking on the recent acquisitions of Capital Foods and Organic India. The approximate quarterly charge is about INR 55 crore here. Then on the net interest income line, again, you would see a big swing that is impacting the profitability by almost 200 basis points. That again is on account of two factors. One, we have swept up the cash that we were carrying to fund for the acquisition, and we have a bridge finance of INR 3,000 crore that we will be taking out once we have the proceeds of the rights issue. And that is impacting the profitability at a PBT level this quarter. So with that, the PAT growth came in at -12%, and the net group net profit, therefore, consequently came at -14%. Segment performance, nothing much to call out. As Sunil has already explained, the way we are reporting our segments are consistent with what we have followed in the past, which is to account for the businesses as per their geography. And therefore, you will see a bit of a diversion from the way we are explaining the numbers to make it more understandable versus the way we are reporting it in our segments. Yeah. So if I conclude, A, the intense summer in many parts of the country impacted demand, especially for hot beverages, which is primarily a tea business in India, and out-of-home categories. Within international, demand remains stable in U.K. and Canada. Coffee category in the U.S. continues to face some headwinds and high volatility in terms of coffee prices. Erratic weather patterns have affected tea production in India, leading to volatile prices. While packaged beverages, ready-to-drink, and Starbucks businesses were impacted by the heat waves which I talked about, India Foods, International and non-branded delivered a strong performance. Growth businesses accounted for 29% of the India business, that's including Capital Foods and Organic India. The international business continued its strong momentum, growing 8% in constant currency with a significant expansion in EBIT margins of 420 basis points, led by structural interventions of the past as well as tactical pricing. Non-branded business continued to benefit primarily from record high coffee prices. While the Capital Foods integration is largely complete, the transactions for Organic India were completed on 16th April, and we have made a commitment of completing it in 100 days. Yeah. We can open the floor for Q&A now. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Abneesh Roy from Nuvama. Please go ahead. Yeah. Thanks. My first question is on your initial remarks of pilot project you are doing in chemist shop and food service. If you could elaborate what exactly you are testing there and when do you see proof of the pudding coming out. Second is now that three, four months of the M&A has happened on these two, what are the key differences in terms of technology, systems, and process, and which ones would you need to change to align with the mother company? So thanks, Abneesh. So in terms of channels, as was the hypothesis right in the beginning when we acquired these companies, we have products which could appeal to the pharma channel, excepting today our distribution system doesn't reach into the pharma channel because they're not geared towards that. They primarily reach to the kirana stores and groceries. The idea is to figure out a distribution system which might. So there are different ways of reaching the pharma channel. You can go through an OTC distributor, you can go through a pharma wholesaler, you can go through an FMCG distributor. So it's basically to prove a sustainable model by which we can reach the pharma channel. So we are trying out a few hypotheses because we do believe if we manage to put this system into play, we can sell a decent range of premium products into this channel. Because if you look at pharmacies, normally they would sell green tea, they would sell coffee, they would sell premium water, they can sell low-sodium salts. A lot of them do sell sauces, ketchups, etc. So that's number one. In food service, again, the idea is that today we have a portfolio which includes almost everything that a significant portion of what a hotel or a HoReCa channel player buys. Again, we do not directly reach that channel today. And like we've said, if you look at it globally, many of the large multinationals do have a dedicated food service distribution system. So the idea is to figure out how to create that system between Capital Foods and the soups, noodles, ketchups, sauces that they have, the tea, coffee, salt, pulses, water. I do have a sizable portfolio to address the HoReCa needs. Again, the idea is to first create a pilot to figure out that we can profitably sustainably build this channel out. And once it is thrown out, then we'll figure out how to scale it. So that's number one. In terms of having seen these different products, the manufacturing technologies in these two products are different, right? So that is one of the things we highlighted is, again, this is in line with what was the hypothesis for the acquisition, is these are value-added products with gross margin significantly ahead of our base portfolio. The manufacturing technologies for these are different. For example, in Organic India supplements, it's manufacturing capsules, right? I mean, nowhere else in our business do we manufacture capsules. Now we've learned what we need to do to handle that part of the portfolio. Or, for example, in Capital Foods, one of the highest-selling products is Schezwan Chutney. In our system, we've not sold chutney, not in bottles. So now we've learned those technologies. I do think we have integrated these businesses very well so far. There are opportunities that we've seen. We've highlighted that earlier in terms of synergies, in terms of various cost items, including packaging, etc., which the team is focused on. But in technology terms, again, this is not high technology in its truest sense and therefore not difficult to master. Understood. My second question is on the heat wave in Q1. So it impacted both in-home tea consumption and also impacted NourishCo out-of-home consumption. So now global warming is a reality. This kind of effect can again happen next year or maybe a year after that. So is there any proactive step you can do to de-seasonalize Q1? Second related question is FY 2024 started with a ban for NourishCo. After that, almost every quarter, some other issue has happened. So in terms of distribution or the pricing, you mentioned some bit on pricing also. Is now NourishCo 2.0 needed to overcome all this? So a couple of things. Abneesh, I cannot predict the future, and therefore I cannot predict what climate change will do. All that I can do is make sure that my system is robust enough to handle the ups and downs of either consumer demand or commodity cost fluctuations as and when they happen. Last year also, that's I'm talking of FY 2023, 2024, also we had seen heat waves in, if I'm not mistaken, in the month of July and therefore commodity prices going up and down. This year we saw a slightly more severe version, so to speak. Yeah. But the point about de-seasonalizing is I cannot change consumer demand per se, right? And therefore that is the difficult portion. But at the back end, we are putting in systems to make sure that we are adapting to these changes as we go forward. That's number one. NourishCo, you're absolutely right. I think we need a set of corrections. As I said, while it had an impact of unseasonal summer and an impact on out-of-home consumption, as I mentioned, we also did not take some tactical pricing decisions in time for the business. So I wouldn't go as far as to say we need a NourishCo 2.0. I think we just need to put our feet on the ground, our heads around the table, figure out what it needs to fix and go fix it. As simple as that. Not a very difficult proposition. I would think the team has already started putting last quarter itself towards June, we've started putting the corrective actions in place. Sure. I'll come back in the queue. Thanks a lot. Thank you. The next question is from the line of Manoj Menon from ICICI Securities. Please go ahead. Hi, team. I've got a couple of clarifications. If I take a step back, let's go 12-18 months back, you had attempted a bunch of innovations, right? Whether it be Saffron or Almond, etc., in e-comm specifically. And I do recall there's been a lot of new category experiments you have done. If we just highlight what are the learnings from those, and are there any particular subsegments which you see significant promise? So Manoj, absolutely right. I mean, one of the reasons why you see something chugging along at a 37% is because of some of the innovations and expansions that we've done, especially online. Specifically coming to dry fruits, that was one of the categories that we had entered with the hypothesis that, A, there is no national brand, B, it is a trust deficit category, and therefore we have every reason for the Tata brand name to succeed there. And we've been proven right because only online we've managed to build about a INR 70-80 crores run rate in dry fruits. After that, about six months back, we took it offline to figure out whether now it has legs to go offline. We figured a couple of tweaks needed for the offline business. A, was instead of the standard pillow packs that we were selling online, we needed stand-up pouches. And B, the consumers in offline wanted, at least in specific, for example, in cashews, needed a transparent window to see what is the percentage of broken in the packs, for example, right? So it took us some time to get the packaging modified. But now that we got the packaging modified, we are seeing traction on placing dry fruits in offline as well. Similarly, cold-pressed oils, one of the hypotheses again was there is no big national player there, and therefore there is an opportunity in a category which could be a question, right? Is it really cold-pressed? Is it not? And therefore we put in, if I'm not mistaken, we put in two or three SKUs, and slowly now we're figuring out success. Again, we are coming up, I think, close to INR 100 crore run rate only for cold-pressed oils and only online. But that, for now, we will continue online. And at some point of time, we need to figure out if at all we go to offline. Understood. Generally, if I just understood, I could understand, let's say, of the excellent growth in Sampann, how much broadly would be, let's say, the base one, which is, let's say, pulses, etc., and the newer products? So I would say probably a two-thirds/one-third. Probably two-thirds of the growth is coming from the base businesses, and one-third is coming from newer launches, which I would say is probably 12-18 months old. Understood. So that's very helpful. Just one comment you had made, I think, again, 18, 24 months back, was that in Sampann, the pulses part of the business or, let's say, the closer-to-commodity part of the businesses, given that some value has to come from supply chain also, you had indicated some work being done there. And if I recall correctly, it was a year timeline from that point in time. Any update, any changes you have done, any tweaks in the backend? So Manoj, essentially, we had said that as we grow scale and as we stick in the business for a longer time, we will figure out how to build margins in the business. Now we are seeing Sampann margins slowly, steadily rise every quarter. And that is for two or three specific reasons, right? A, as we've played around with these commodities, we've learned more about the commodities. We've learned about the cyclicality of the commodities. For example, now we know we monitor your sowing area right in advance so that we know upfront what is coming around the corner in pricing. Or we figure out right now whether the crop is high, low, etc., and therefore what is going to happen in pricing or the fact that the government is allowing imports and/or exports and therefore what's happening in the pricing. So A, trends we are able to read better, number one. Number two, we've got larger scale and therefore the ability to negotiate harder in the mandis when we are buying. And number three is very, very specifically, we have now started to look at 3-4 months ahead and take positions on commodities. Yes, have we gone right all the time? No. But broadly, we have been in the ballpark on the money when it comes to making the calls on going forwards. So these are the two or three big items that we've learned to do. And like I said, Sampann margins, the good news is they've been creeping up every quarter. Very clear. Thank you. And one last thing from my side, your views on Q-commerce and how significant it is for you. And because the reason I'm asking about what I do here from those companies is that it appears to be a channel which kind of, let's say, pushes premiumization significantly, right? So just some color on, let's say, how are you working with Q-commerce and within your e-commerce, how big has QC become as we speak? Thank you. So Manoj, we have seen overall e-commerce grow and within e-commerce, Q-commerce grow quite significantly. Now the good and bad part is in some cases it's difficult to quantify what is QCommerce and what is commerce. BB and BB Now, right? There is a very, very fine line drawn there. But that said, if I'm not mistaken, about 35% of our e-commerce business, and we showed you e-commerce is growing 60%, about 35% of that is coming from QCommerce. Very clear. Thank you so much and good luck. Thank you. The next question is from the line of Mihir P. Shah from Nomura. Please go ahead. Hi sir, thank you for taking my question. So my first question is on the tea landscape in India. I believe that in this quarter also, there is a price cut that was effective along with the market leader who had also taken a price cut. And now we are seeing tea prices shooting up. How should one read the tea prices shooting up as your low-price commodity would have been exhausted in this quarter and maybe higher tea prices can start impacting margins? So maybe some color if you can share on pricing action needed or margin pressure and the competitive intensity in the tea landscape currently. So Mihir, apologies for this, but in line with what Nidhi said, right, I cannot make any forward-looking comments today. I can give all the clarifications after we finish the Rights Call later on. But for now, I can give you data points of the past. You're absolutely right that there have been some cuts in price and/or additions of gramage at the same price in the last quarter, number one. Number two, tea prices in North India have been up by about 15%-20%. Tea prices in South India have been up by about 10%. Got it, sir. I understand completely. So second, I wanted to check on the international business. Coffee prices, again, they have shot up. We are seeing pressure on volumes once again on coffee prices. However, I believe given the change in dynamic that have happened with Hindustan Unilever globally in the tea, you are being a key beneficiary of tea, and that is why we are seeing good growth in tea coming. So maybe if you can help us with the breakup like you used to give before on constant currency volume pricing, that would be very helpful for us to model in our numbers. Fair point. The only reason why we did not give volume this, for example, India Beverages, like I said, today includes Organic India and India Foods includes Capital Foods. And that is why we have not given volume because it's not a straightforward line. But point taken, we will try to be more specific as we go forward. Got it, sir. Thank you. And that's all from my side. Thank you. The next question is from the line of Latika Chopra from J.P. Morgan. Please go ahead. Yeah, hi. Thank you for the opportunity. My question was your prices and let me put in. Sorry to interrupt, Latika, but the line for you is not very clear. I request you to please move to an area with better network. Yeah. Is it better now? This is better. Yes. Please go ahead. Yes. So my question was tea prices, and let me try to put it in a different way. I wanted to understand what is the procurement process? What is the salience of North India versus South India tea composition in your mind? And what is the strength on inventory holding for tea that you have? And I believe the typical tea procurement season starts for you over June, July. If you could give some color on the process and the typical inventory that you hold. Thank you. So Latika, A, overall industry is about 80/20, 80 North India and 20 South India, and we are more or less in line with the industry. That's number one. Number two, you're right. Actually, procurement season for us starts sometime, I would say, middle to end of May and goes on till about October, November. Yeah. And we buy through the season because starting mostly depends. Sometimes early December, sometimes end December, the tea board would stop auctioning in North India. And therefore, there is very minimal tea available, and whatever is there is not of the quality that we would require in the entire Q4. So buying is primarily middle to end of Q1, going up to Q3. All right. And okay. Then specifically Organic India. Sorry to interrupt, ma'am. Your line is not clear again. Okay. Okay. I don't know. I'm speaking from my handheld only. Is it better? Yeah, this is better. Okay. My question was on the India business revenue growth on an organic basis was 7%, and the EBITDA growth was 6% in the quarter. Any color you can give on what caused the margin moderation or anything specifically? So it was primarily, I would say, impacted by two items. Number one is there is basically extra A&P spending that we have done during the quarter to fuel the brands, and we called that out. A&P percentage to sales in India is 7.8%, number one. Number two is we've added feet on street, which again has impacted the P&L line, and there have been that cost which has come into the P&L. Both of which we think is the right direction for the business to go to. Also, just to add, we've also lapped up the cost of Capital Foods and Organic India, which has also come into the base now. And as these businesses scale, we will start seeing the leverage come through. Okay. All right. Thank you. Thanks, Latika. Thank you. The next question comes from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, good evening, team. My first question is this time you have not explicitly mentioned anything on the market shares in tea and salt. Can you just elaborate on how has been the trend for you? So let me say, Vivek, trends have not changed dramatically from the past. Yeah. Historically, we've seen gains in salt. Tea prices more or less have been balanced between the two years. Yeah, that's all I would say for now. Okay. Got it. Got it. And on the NourishCo bit, Sunil, once again, do you think I mean, you did mention about some of the interventions, but from a product perspective, you are still happy with the product, whatever is there in the market? And I know you can't talk about post the quarter, but anything to relook from a product perspective, offering perspective? So from a product perspective, I don't think there is anything significantly wrong, Vivek, because these products have, how do I say, been proven over the past few years. And as we've driven availability, driven distribution, we've seen instant reaction. Like you saw, Tata Copper+, there is absolutely even last quarter, despite the heat wave, we didn't see too much of an impact. Say Never, for Tata Gluco+, as I said, we missed some tactical tricks as there were moments in competitive activity, and I think we did not react quick enough. We put in those corrections end of last quarter. And on top of that, we have also launched Tata Fruski now in cups, which got a good response last quarter, and now we are expanding it. Say Never, the energy drink, if you remember, which we had piloted about three quarters back, I think we are off to a good start, and we are going to expand. So that's number one. Number two, I would also urge saying that if you look at last year Q1 for NourishCo, if I'm not mistaken, we had grown close to 60%. So we are cycling a very, very high base. So multiple pieces there. But let me say there is nothing that I find worrying in the business that we cannot correct going forward. Okay. That's good to know. Lastly, from a presentation versus SEBI disclosure, I mean, it complicates things a bit at our end because your segment from a, let's say, even at an overall level, India versus international, the SEBI disclosure has international piece of Capital Foods as well as Organic India, whereas the way in which we model revenues would be from PPT. Is there a possibility that you can align presentation also to include the way in which you include Capital Foods and Organic India as part of domestic sales instead of because as these two businesses grow faster, I think the gap between segments will keep expanding quite a bit. Is that something that you can look at? Fair point. Vivek, we'll definitely look at. I mean, we've got this feedback, I think, from multiple people in the past one hour or so. So the idea is we want to be very transparent in the numbers that we put out. We will try and give all the different options so that you can look at and model it your ways. Appreciate that, Sunil, and wishing you and your team all the very best. Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Hi. Good evening. Just following up on the previous question, right? I mean, for this quarter, can you just give us a breakdown of how much would be the international business within Capital Foods and Organic India? So let's get back to you separately on that, and we will give all the numbers. Understand. And lastly, I mean, would you have a breakdown of contribution of modern retail and e-commerce for at least at a segment level, let's say beverages for foods? No, unfortunately, we don't track on a daily or a regular basis contribution by category, by channel on a consolidated basis. Overall, historically, we've had about 11%-12% contribution from e-commerce and 14%-15% contribution from modern trade. All right. That's very clear. Thank you. Those are all my questions. Thank you. The next question is from the line of Vishal Punmiya from YES Securities. Please go ahead. Vishal, the line for you has been unmuted. You may proceed with your question. Yeah. Am I audible? Yes, you are audible, sir. Yeah. So my question is on Capital Foods revenue for the quarter. So we have clocked around INR 164 crores for the quarter, which if I extrapolate it for full year, it looks way lower compared to the growth rates we are targeting for the business, as mentioned in the previous quarterly call. Any seasonal effect in the quarter or anything that needs to be highlighted? So a couple of things. You're absolutely right. If I do a straight line method, then INR 640 crore is roughly what we acquired the business at, right, for last year. And that's absolutely not the intent. I would just urge you to remember saying that by the time we finished signing up and starting to integrate, we were already in middle to end of Q4 last year. Therefore, this was still, I would say, a quarter of integration for a couple of reasons. Number one was, as I said, when we took over the businesses, we figured out the inventory in the channels was a decent proportion higher than what we had expected it. So that took some time to normalize, number one. Number two was while we moved the stocks from distributor A to distributor B, etc., etc., we insisted on a full and final before we started operations so that we don't land up into issues with any of the distributors anywhere. And that's why we've had a very, very clean transition, even though in some places, business paused for about a week, 10 days or so. That's number 2. Number 3, with modern trade, in many cases, we did see some discussions starting again on terms of trade and can we do this, that. So there were pauses there. While also, there were some delays on innovation moving from Capital Foods to TCPL, including in the case of canteen services, etc., where again, the supplies did get hindered to some extent. Apart from that, of course, there was also the quarter of learning for a team which was handling these categories for the first time. And therefore, the logic of forecasting, bypass, by channel, etc., took a little bit of learning. For example, in ginger garlic paste, the team under forecast the ₹5 pack and over forecast the 200 grams pack or completely under forecast the business in soups and then scampered around trying to figure out how to make ends meet. So I would term this quarter as a quarter of learning. But like I said, we saw June almost normalize and come back to what we would expect the business to deliver going forward and therefore remain confident that we should be able to deliver the business case. Understood. And also, in terms of gross margins, you mentioned combined gross margins at 48.4%, and this looks lower than the 50% gross margin that Capital Foods has and 55% that Organic India has. So when all these things normalize, do we expect those gross margins to go back to previous level? Yeah. Yeah. Ultimately, we do expect gross margins to come back to the numbers that we stated, which is significantly accretive to our current portfolio. In fact, if anything, those gross margins should climb higher and not stay where they are. Understood. Thank you. Thank you. Next question is from the line of Akshay from Fidelity. Please go ahead. Yeah. Hi. Just a couple of questions on the acquisitions. First, for the quarter, you've called out gross margins. Could you just help us understand if the EBITDA margins I know at EBIT, you will have amortization. So at EBITDA margins, are the two acquisitions accretive to overall margins in Q1? That's question one. And then question two is that from the time of acquisition to the closure, we had a number on revenue of around INR 1,100 crore between the two acquisitions combined, which was your forecast for FY 2024. Would you have an update on sort of if the numbers was ballpark the same number? Because when we are forecasting growth, we're looking at that number. So I don't want to mismatch that the number is higher or lower versus what we were thinking about when we made the acquisition. Thanks. So to your question about EBITDA margins being accretive to what we took over, absolutely, yes. With a small difference being we're seeing it significantly higher in Capital Foods because we had one full quarter of integration. Whereas Organic India, I would remind you saying we signed or we closed the deal on April 16th. And in Organic India, unlike Capital Foods, we did not transfer stocks from distributor to distributor at the ground. We got stocks back to the C&F because 400-odd distributors, small distributors didn't want to get into issues of trying to settle with each and every distributor. And therefore, it took a little bit longer. But let me say Organic India broadly has delivered margins in line with what they were delivering earlier. Capital Foods, we've started to see the incrementality. We do not have any reason to believe we will not be able to deliver the incremental numbers that we had looked at in the business case because nothing has changed in the assumptions. So that's number one. Number two, for Capital Foods and Organic India, you mentioned that we had said about if I'm not mistaken, it was 700 + 400, INR 1,100 crore is what we had talked about roughly. Instead of that, the final numbers for FY 2024 came in at INR 1,007 crore. Okay. Sir, just to follow up, when you're thinking about growth of 25%-30% on a 100 basis, you're looking at it on the revised base or at 1,100? Right now, we are working on what we have, and we remain quite confident that we'll be able to deliver the business case. All right. Thank you for those clarifications. Thank you. Ladies and gentlemen, we will now move to the questions that we have received online. Yes. Thank you. So I'll just read out a couple of questions. There is a question from Amit Agarwal. He's asking about the fact that we mentioned in the previous quarter that we lost market share in tea business domestically. Have we been able to recover that? What is it as of now in tea and salt business? I think we've already answered that, Amit. We've given you some flavor on how it's been trending. So I'll move on to the next question. In terms of, the next question is from Sachin Jain. He's asking, can you please provide EBIT coming from Capital Foods and Organic India for Q1? Again, I think. So on that one, very clearly, we do not break EBIT percentages for each and every category in India. We club it under the India business overall, and we report the EBIT numbers for India because that's the way we manage the business. We do not have separate supply chains and separate sales systems for our different businesses. And therefore, we do not want to get into this allocation business and calculating numbers for every single category. I would urge you to look at EBIT and EBITDA numbers for the India business totally because one of the things that we had said was Capital Foods and Organic India margins are accretive, and therefore, they will be accretive to the EBITDA margins. I think you should watch out for the fact of whether we are delivering to that number or not. Yeah. Thank you. I think, yeah, there is a question from Senthil. He's asking, in terms of energy drinks, are you looking at adding any SKUs in PET bottles similar to competition? So Senthil, very, very clearly, we have always maintained that you've got to play to your core competency and/or your differentiation. We do think that our primary differentiation is the fact that we are in cups, which allows us to have distributed manufacturing at low-cost CapEx. Basically, as long as we drive around 150-200 km radius, it's a profitable business to drive. Our cups are priced at INR 20 versus most of the big brands in the market of energy, which are priced at INR 20. Therefore, we do think that price will be a significant differentiator. There is no intention currently of moving into PET bottles. Cups is my single biggest differentiator, helps me manage the price point, helps me build the imagery. Therefore, currently, we stick to it. Okay. From Vishal, he's asking, in the last quarter, you had briefly mentioned about vending business. Could you provide a brief update on the same? Secondly, could you provide some flavor on the amortization charges pertaining to the new acquisition? So on the acquisition, as I mentioned while discussing the financials, that is a charge of about INR 55 crore per quarter, and that is likely to remain static quarter on quarter. Yeah. And in the vending business, we did say that we have started we did a pilot for the vending business. Having seen success and the fact that we can build a sustainable business, we are starting to accelerate placement. We now have an installed base about 1,700-odd machines, and the plan is to aggressively expand that going forward. Yeah. I think with that, we come to the close of this call. If you do have any pending questions, you can get in touch with us. Thank you again. Thank you, everyone. Thank you. Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.