Ladies and gentlemen, good day, and welcome to the Varun Beverages Limited earnings conference call. 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, please signal an operator by pressing star and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on Varun Beverages Q4 and CY 22, 2022 earnings conference call. We have with us Mr. Ravi Jaipuria, Chairman of the company, Mr. Varun Jaipuria, Executive Vice Chairman and Whole Time Director, and Mr. Raj Gandhi, Group CFO and Whole Time Director of the company. We will initiate the call with opening remarks from the management, following which we'll have the forum open for a question and answer session. Before we begin, I would like to state that some statements made in today's call may be forward-looking in nature. A disclaimer to this effect has been included in the results presentation shared with you earlier. I would now request Mr. Ravi Jaipuria to make his opening remarks. Good afternoon, everyone, and thank you for joining us on our earnings conference call. I hope all of you had the opportunity to go through our results presentation that provides details of our operational and financial performance for the fourth quarter and full year ending December 31, 2022. We are pleased to close the year on a strong note with exceptional operational and financial performance reported throughout CY 2022. The strong recovery in demand post the pandemic and our continued efforts towards expanding the distribution network across markets resulted in a 41% growth in consolidated sales volume. Additionally, we achieved growth in realization per unit through strategic measures such as selective price hikes, rationalized discounts and incentives, and improved product mix. This allowed us to deliver revenue growth of 49% and PAT growth of 108% year-on-year on a consolidated basis, CY 2022. We are excited to share that our energy drink, Sting, had a remarkable year, contributing significantly to both volumes and realization growth. As the product is an expanding category, we anticipate its strong performance to sustain in the coming year. Our recent launches in the value-added dairy segment has also been well received by consumers, and we are confident that these products will continue to drive growth in the future. As a leading beverage serving over 1.3 billion customers globally through our extensive network of over three million retail outlets, we take our responsibility to the environment seriously. We are committed to sustainable and responsible operations and have taken a proactive stance in promoting sustainability in the beverage industry. Our aim is to minimize our impact on the environment and foster sustainable practices throughout our supply chain. Looking forward, we aim to further strengthen our position as a key player in the beverage industry by leveraging our strong presence in fast-growing markets, solid infrastructure and well-established distribution network. Our focus remains on delivering high quality products, further expanding our reach in key markets, and capitalizing on new opportunities to create sustainable long-term value for all stakeholders. I would now invite Mr. Gandhi to provide the highlights of the operation and financial performance. Thank you very much. Thank you, Mr. Chairman. Good afternoon, a warm welcome to everyone joining us today. Let me provide an overview of the financial performance for the fourth quarter and year ended December 31, 2022. Revenue from operations adjusted for excise GST grew by 27.7% year-on-year in Q4 of the current year, 2022, to the level of INR 22,142 million. Sales volume grew by 17.8% in Q4 CY22 to the level of 132 million cases. For the year 2022, total sales volume grew by 40.9% to a level of 802 million cases, driven by strong performance in India as well as international territories. In the calendar year 2022, net realization per sales improved by 6% to the level of INR 164, primarily driven by price hikes in select SKUs, rationalized discount and incentives, and improvements in mix of smaller SKUs, especially the energy drink, Sting, which has a higher net realization. The mix of Sting in our sales volumes continues to grow exponentially to about 9.6% of total mix in India for the year. This is leading to improvement in net realization as well. On the profit front, despite inflationary pressures in raw material costs, Gross margins were minimally impacted during the year due to early stocking of crucial raw materials and an increase in realization. During the year, gross margins declined by 180 basis points to the level of 52.5% primarily due to a surge in preform prices by more than 30%. EBITDA still increased by 68.5% to reach INR 27,081 million year-on-year. This improvement was driven by a rise in realization and operating leverage from increased sales volume, which resulted in an improvement in EBITDA margins by 241 basis points to 21.2% in CY 2022. Depreciation increased by 16.2% to the level of INR 6,172 million, as compared to INR 5,313 million in CY 2021. This is on account of capitalization of assets. Finance costs remained almost flat in calendar year 2022. VAT increased by 150.2% to the level of INR 815 million in Q4 2022, from INR 326 million in Q4 2021. For the calendar year 2022 full year basis, VAT grew by 107.8% to the level of INR 15,501 million, driven by high growth in revenue from operations, improvements in margin and transition to lower tax rate in India. On the balance sheet front, net debt stood at INR 34,096 million as on 31st December 2022, as against INR 30,053 million as on 31st December 2021. This increase was due to our greenfield expansion under implementation in the states of Rajasthan and Madhya Pradesh, as well as brownfield expansion at six plants in India for CY 2023. Our debt-to-equity ratio stood at a healthy level of 0.65, and debt-to-EBITDA ratio of 1.23 x as on 31st December 2022. Working capital days have stayed at the same level of 36 days as on 31st level 2022 as in 2021. The inventory of finished goods has increased in preparation for the next season in order to avoid any stockhold situation. During 2022, the company invested in various expansion projects, including INR 6,300 million primarily for greenfield expansion in Bihar and Jammu and brownfield expansions in India, and INR 2,500 million in brownfield expansion in Morocco and Zimbabwe. Additionally, INR 3,700 million for purchasing land for future capacity expansions for the year 2024, 2025. As of 31st December 2022, the company had a CWIP of approximately 6,066 million for further greenfield expansion in Rajasthan and Madhya Pradesh. That's for 2023. Brownfield expansion at six existing plants in India. The next CapEx estimated for 2023 is around 15,000 million. This growth-oriented CapEx will be primarily funded through internal accruals, further reinforcing our financial position. In line with the guidelines of dividend policy, the board of directors recommended a final dividend of INR 1 per equity share. With this, total dividend declared for the year of 2022 stands at INR 3.50 per equity share. The total cash outflow for dividend payout will be INR 2,273 million for the year 2022. This includes the interim dividend already paid. In continuation, we are pleased to report a successful year for Varun Beverages, marked by a robust balance sheet, strong cash flow generation, solid growth momentum. Our commitment to delivering value to all stakeholders and capitalizing on our opportunities will continue to drive sustainable long-term growth for the company. On that note, I come to an end of the opening remarks and would like to now ask the moderator to open the forum for any questions or suggestions that you may have. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Chirag Shah from CLSA. Please go ahead. Yeah. Hi. Thank you very much. Encouraging to see a strong Q4. My first question is to Mr. Jaipuria. Sir, it's good to hear about the development in the snacks business. Can you elaborate on our vision and the broader terms of the snacks business relationship with PepsiCo in Morocco, where we are also taking over the distribution responsibility? Would you say that we are incrementally getting more confident of managing the snacks business that we've just started? Will we be looking at setting up manufacturing capabilities in these markets? Lastly, in India, where PepsiCo already has a distribution set up for snacks, can PepsiCo consider giving us distribution rights in these markets as well? Well, I hope one day they do, but I don't. At the moment, no. I don't think in India they are looking for any distribution or. Except setting up plants, maybe we can expand setting up plants, but for only co-packing and giving it to PepsiCo. In Morocco, definitely we have started the operations in January. We have started distribution and their complete range of products. We hope we want to stabilize that business in the next three months -six months. Maybe once we stabilize it, we will talk to PepsiCo if we can start manufacturing there. As of now, it will be imports which will go into the Morocco market? That's right. It used to be imported, but now it's under us. We are importing from two countries, Egypt and Portugal. Sure. I see that, you know, even in India, the manufacturing facility has started. Obviously, it's early days, but are there any learnings from that and are we now looking at further expanding that business? Yes. I think, I mean, we've had a good start. There has been no hiccups, and our production started, I think, in end of November or early December. We are producing to full capacity, and I think PepsiCo is looking to asking us to expand this operation. That's, that's encouraging. My second question is to Mr. Gandhi. Sir, there's been a very sharp increase in inventory for the quarter. Of course, you explained by saying that you are preparing for the festive season for the peak season. Typically, you know, we use Q1 to prepare for the peak season, but this time around, we have done that in December itself, suggesting that there could be serious capacity constraint that we'll be facing. Is that understanding correct? Let me answer this to you instead of Mr. Gandhi. Sure. You know, like anywhere, all deliveries for most of the equipments are slightly delayed. We don't want to take any chance by running out of stock, so we have pre-stocked much earlier this year than we normally do. We have safeguarded ourselves, and as most of our lines will become operational in the next month, actually most of them this month and next month. Still, if there are some slight delays, we have safeguarded ourselves and taken that instead of starting pre-building in January and February, we have started pre-building in December itself. Secondly, our raising prices are always at the lowest in November and December. We, well, we like to pre-stock it as much as possible what we are able to get from the suppliers. That is another reason, and that also safeguards us from the price increases, and that's how we got partly saved in 2022 also. We have done that again this year to safeguard ourselves. Chirag, just to add, what Chairman has just said. The season reaches the peak near around Holi. This year, Holi, I think, is going to be about 15 days prior to, you know, last year, which necessitated building the stock, which we used to start from January. From December itself, so we started. Chirag, one more reason. Now our south and west is becoming more important to us as we are consolidating and going improving our go-to-market. Those seasons start much earlier than north. Those seasons actually start in February, not after Holi also. That's very helpful. In fact, that brings me to my second question that, you know, now do you feel with the south and west territories also growing faster, the seasonality that we have in our business, is that structurally coming down? Well, we have seen that already, Chirag. That's why you see the quarter four numbers much stronger than last year's. It is because our the new territories, south and west, are performing well for us. The numbers are becoming much better, so the quarter four numbers are becoming much stronger. Right. In terms of distribution, our products are now hitting about three million odd outlets. What according to you is the scope for us to, in terms of further distribution expansion, and how do we reach there, both in terms of number of outlets and then the visi-cooler infrastructure? We are looking at about 10%-15% at least expansion in the number of outlets. That's what we aimed at about 15, and we hope we can reach that. Our target again this year is also to try and reach anywhere close to 3.5 million outlets, if we can. With the expansion of distribution, the trucks, the distributors, the vCoolers, they're all being added proportionately to what it is. Understand. One last question, if I may. You know, on the dairy business, is there enough time to at least share the grand plan with us as to when do we do a national rollout, and how do we take these products forward? I think the national rollout will only happen in 2024 because our production lines are only going to be ready by end of this year. We will be tripling our capacity by end of this year. I think for 2024 we'll be ready to expand in a much bigger way, and it will be a national rollout. Right. As we prepare for the national rollout, do you think there, the sourcing for dairy is pretty much in place for all the regions? Yes. Sourcing will not be a problem. Sure. Thank you very much, and all the best. Thank you. Thank you, Chirag. yeah. We are waiting for the questions. Yeah. It's from the line of Nihal Jham from Nuvama. Please go ahead. Yes, good evening, and congratulations on your strong performance. Three questions from my side. The first is specifically for this quarter. What was the contribution of Sting? I think the 10% number was for CY. If you could just give the number for this quarter. I can't hear you properly. Can you just repeat? I'm so sorry. I was asking the contribution of Sting for this quarter? Mr. Jham, I think if you are on a speaker mode, could you please... Am I audible now? Am I audible? I'm so sorry for that. Yeah. The Sting contribution was much higher than the full year contribution. It went up to as high as 16%. Sure. That is helpful, Mr. Jaipuria. The second question was that in your presentation you've alluded to the aspect of taking some price hikes in select SKUs and also on reducing discounts. Now, historically, VBL is a business which has seen significant volume growth. Just given the kind of competitive intensity that the beverage business has, wanted to understand the reason that we are thinking of this as an additional lever for growth in the coming year or maybe years ahead. Of course, you know, we have, you know, grown the market share and the penetration, definitely we have used that. Apart from that, whatever opportunity came in reduction of discounts, et cetera, we agreed. We have done performed on both sides actually. More than that, basically as price increase on SKUs also the mix has helped us, including the Sting, which is mostly in the smaller packs. On blended basis, smaller packs contribute higher margins. Sure. Absolutely. Looking ahead, would we wanna use this lever or this is just specifically this year that we've tried targeting reducing the discounting? No, discounting is a very relevant situation. It depends how the competition also behaves. I think, the key issue is our job is to keep on expanding the distribution network and keep on making new products available, which like Sting, for example, is a product where we don't find that much competition. Obviously, and our dairy products, there's no competition as far as our main competitor is concerned. Wherever we get an opportunity, there we try and reduce some discounts and also always single serve, the margins are much better than large multi-serves. Our single serve business is growing at a much faster pace than the multi-serve business. Moreover that remark was with reference to the commodity prices going up in food costs. Part of that, you know, how we retained our margin was by reducing the discounts and which you can see from our P&L. Got that. Last question was for CY 2023. Could you highlight which those six plants are? I think Rajasthan and MP would be two, the other four. Debt target for CY 2023, and if you have one. No. There'll be Rajasthan, Madhya Pradesh, as well as, six brownfields. It'll be over and above that, the two. It'll be over and above the two. Yeah. On the debt target? Debt, we don't work with a target. Our only target is to reduce it. What happens is, you know, our balance sheet is made in the month of December when the CapEx is going on. In midway, sometime in the, you know, H1, you will see it will be at the lowest because, then it starts paying off for itself and comes down, and it should come down substantially, even, you know, lower than the last year's H1. Understood that. Thank you so much, and I wish you all the best. Thank you. Thank you. We'll take our next question from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, good evening. A few questions. First is on Sting. For this year, it was 10%. For the quarter it was about 16%, you mentioned. I'm guessing there will be some seasonality in rest of the portfolio, so number may be exaggerated. Where do you think this number settles down in the next few years? Do you think that the, you know, exaggerated growth over here is like, is going to moderate as we go forward? Can you also, you know, you respond to this in the context of competition, you know, that has also launched a product which is quite similar to yours? I think first of all, Vivek, energy drink in the growing markets is actually becoming between 10%-15% of the total mix. There is no reason why Sting, our energy drink, should be between 10% and 15% in India. Now it would depend what mix our competitor's energy drink maintains. Our energy drink percentage would differ based on some of their, you know, how their people perceive their energy drink. Otherwise, between 10%-15% should be the energy drink market as such. Got it. Okay. The other thing is, you know, your presentation doesn't talk about it, but, you know, this India 1 billion volumes which you have had, you know, come up, or have had, given in social media yesterday. Can you just talk about that number by 2025? That is basically vision of the company, that number. Because this year, our, we India already we have reached 652 million cases out of this 816. Making another about 50% growth over a period of three years, that's the internal vision which to our sales team we have given. Okay. That's, that's very interesting and very strong number. Mr. Gandhi, on the CapEx side, I have a doubt, you know, your cash flows shows about INR 1,800 crore, and if you look at, you know, on the gross block and CWIP changes, that number is about INR 1,350 crore. Can you just talk about where is the rest INR 450 crore? CWIP. CWIP. Yeah. Okay. Capital Work in Progress or capital advances is sitting there. No. Capital Work in Progress is something I have taken. I'm saying the delta change in gross block, delta change in CWIP, that number comes to about INR 1,350 crores and cash flow is about INR 1,800. It's sitting under two heads. One is the Capital Work in Progress. Second is the advances to the equipment suppliers. That's the INR 450 crore number. Both together. Yes, that's right. No. Not both together, right? INR 450 crores is the differential, right? That is the capital advance number because CWIP I have adjusted. The delta change in CWIP is about INR 100 crores. Yes. The differential of INR 450 is sitting under the advances to the equipment suppliers. Okay. The max will aggregate these two. Okay. Mr. Gandhi, when you talk about INR 1,500 crore number for next year, that's the cash outflow or the capitalization? That's the capitalization. Of that capitalization of INR 1,500 crores, INR 450 crores capital advances and sorry about it, and INR 600 crores in the CWIP, right? Those and the balance will be funded in this quarter. Then from the next quarter on, like Chairman mentioned, two more lines for the Green Bell launch, which will be ready by the end of January next year, which will be one in Maharashtra, another in UP for the national launch of the dairy beverages. The CWIP for that will start. Going by this math, INR 1,500 crore capitalization for next year, of which INR 600 right now sitting in CWIP, INR 450 capital advances, that makes it INR 1,050. INR 450 crores is what needs to be spent on these projects, plus you are seeing Green Bell. Plus. Yes, you're right. For the credits CapEx, INR 450 only is to be funded, the balance will again, they will build up on CWIP for the calendar 2024. That's right. Okay, perfect. Okay. Another question is, if I look at your gross margins, in fact you have alluded to that, gross margins, you know, which have contracted in calendar 2022 and the way in which EBITDA margins have behaved. I mean, if you just do the extrapolation of what you are doing in terms of growth and what your guidance is, what you have spoken about billion cases, doesn't it look like, you know, that your margins will actually, you know, at EBITDA level with the operating leverage that you will get and gross margins coming back, you can actually end up hitting more like 20.5%, 23%. Where is this math wrong? Yeah. Vivek, well, you know, this has. We don't like to give guidance better than what we are. 21% already is a very high because it always depends, sometimes sugar is higher or the raisin is higher. We want to keep that safety. It could be, but we don't want to project that because we want to keep some leverage with us. Sure. Sure. Sure. I understand. Lastly, on the foods business, what are the commercials on the foods business, you know, in India when you talk about expansion, Mr. Jaipuria, will it contribute, you know, let's say meaningfully to the base beverage business? No, no. I think it will be very small. We have just started one line with them, and we are co-packing with them, and there is a possibility we might add one more line. It will be very minuscule to the whole thing. Got it. Got it. Thank you, and wish you all the best. Vivek, we borrowed the statement out of your report. It's a foot in the door report. No, because I was asking this question because this time around, Mr. Jaipuria did mention about, you know, more lines. I was hoping that it is more, you know, beyond what we wrote. No, not that, not that anymore. Maybe one more line. We are discussing with them. Thank you, sir, and wish you all the best. Thank you. Thank you, Vivek. Thank you. Our next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. A couple of questions. Firstly, if you can give some flavor on the geographic growth this quarter as well as for the full year, as in which states are clearly growing above your company average and which are really pulling the overall growth for the company. Also, on South and West, I think, when we had acquired, we had said that the cases are about 135 million cases in that geography, but the peak cases were over 200 million cases, and the objective was to reach to that as the first marker. Have we reached that first marker or not? That's my first question, please. I think exact numbers we would not like to give, territory-wise. I think overall, as we are seeing the growth, if we have grown 41%, so mostly it's been throughout the territory. Obviously, some of the territories which we've acquired, where our presence was very low, our growths are much higher. We hope as we are increasing our go-to-market, then the markets where we are very lowly penetrated or were lowly penetrated, those markets are going to grow much faster than. Which is what is showing the difference in our seasonality. Understood. Understood. Secondly, just wanted to understand on Sting. What is the profile of a typical consumer of Sting? Secondly, when he is consuming Sting, is it a completely new consumption occasion for a soft drink or is he actually just sort of switching from some other type of soft drink into an energy drink? Very difficult to answer that. I mean, of course there is some switching and some new customers coming in. As the markets are changing globally, we are seeing that about, in the emerging markets, about 15% energy drinks are becoming 15% of the beverage business. That is what is happening everywhere in the emerging markets. You take in Pakistan, you take Vietnam, you take Africa, you take all the surrounding countries and the emerging markets, this is what the new thing is happening. Is this? That we are seeing it fitting in perfectly. Is this relatively a new phenomenon in these emerging markets or energy drinks sort of a decent part of the market even 10, 15 years ago? Energy drinks were always a part of the market, but they were always very expensive. They used to be like you had Red Bull here, for example. There was always a market for it, but it was a very niche market. Now, since it's been line priced, the market has just gone out of proportion. Basically the salience has increased over the last 10 years or so. I would say even less than that. This has really taken off in the last five, seven years, I would say. For these markets, when this energy drinks explosion has happened over the last seven years or so, has it resulted in the overall soft drink market sort of, growing at an accelerated pace? Or has there largely been a shift between other types of soft drinks and energy drinks, and the overall market has grown at the same rate as before, but with a higher energy drink, percentage contribution? If you look at it, yourself, if we have grown at 41% and this is only 10% of our mix, then our other products have grown at 31% also now. The whole market. Right. Is growing. Right. Right. What in your view is resulting in this really breakneck kind of growth? Does this seem like a sustainable growth? I mean, the ex Sting growth that you've seen, does it seem sustainable? I think it is sustainable. -Or is there something that is really- As a overall growth, I mean, we can only hope. This kind of growth don't happen every day. I don't want to commit anything on it. Like any two or three drivers which are resulting in this super normal growth that we are seeing right now? What is your question? I mean, I'm not clear. I just wanted to know what are the reasons when you said that this growth cannot probably sustain for a long period of time. What is the reason that we are seeing this growth right now? I'm not saying it won't happen, but I'm not saying I want to predict all that because this is a exceptional growth and this... Growths don't happen every year. I hope it can happen, but I'm not willing to commit on that. I hope we have a decent full year this year also. Okay, sir. See, as of now, the base is very small and high growth on that is possible. No, he's not on Sting, he's talking overall. Okay. Yeah, I was talking overall. I definitely believe we'll grow, but overall we should have a decent growth, but I don't want to give any numbers on it. Understood, sir. Very clear. Thanks and all the best. Thank you, Percy. Thank you. Our next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Thanks for the opportunity and, congrats on a good set of numbers. Mr. Bansal, sorry to interrupt. Could you please switch to handset mode and talk, please? We can't hear you that clearly. Yes, sorry. Is it better now? Yes. Thank you. Yeah. Sir, thanks for the opportunity and, congrats for a good set of numbers. My question is, sir, we are doing relatively higher CapEx as well as our working capital seems to be slightly on a higher side versus what we have done in the past. I just wanted to take a sense on the expected growth. Previously, we used to ride around 10%, 11% sort of a volume growth, but that was obviously on a much lower invested capital. Now, since we are also doing a relatively higher amount of CapEx. What is your sense on the expected growth moving ahead? Well, I can't be very sure, but I don't want to give numbers, but we definitely are looking at very good growth, and I hope we can do at least double-digit numbers. All right, sir. Just qualitatively, can we expect that, since we are investing relatively higher amounts, can that growth be qualitatively higher than what we were guiding earlier? I think so, and that's what we are investing, but we would not like to commit, comment on it. I mean, we are preparing ourselves for higher growth and we are putting investments based on that. Till they happen we would not like to comment. Got it, sir. On visi-cooler addition front, this time around I guess we have added some 85,000 visi-coolers versus 40,000 which we used to do. And you in your remarks also mentioned that you expect about 0.5 million increase in the number of outlets as well. Can we expect similar number of visi-cooler additions this year as well? Well, there will be, I mean, we will be having to invest more on visi-coolers because we are expanding the number of outlets at much larger scale. At least, 15%-20% number of outlets we expand has to be with visi-coolers. The rest can be without visi-coolers. If we are looking at 400, 000 or 500, 000 new outlets, about 70,000-80,000 visi-coolers need to go in, approximately. In fact, a part of this year's visi target has been achieved by December itself, therefore you are finding that number slightly higher. Okay. Okay. Sir, there has been an increase in the interest rates. What is the expected margin interest rate for our debt? Well, still, it's not that exceptional increase. Moreover, we have to manage our debt, you know, in next couple of months, once the season has started in the reduction of the debt. Hopefully we don't expect, you know, interest rate, interest payout going upward, you know, any substantially. You might have seen already between 2021 and 2022, in spite of new plants, et cetera, and expansion, interest cost has not gone up. We expect the same for 2023 also. Got it. Sir, 2 bookkeeping questions from my end. If you could provide, the carbonate, non-carbonate and, water volumes for India specifically for this year. We have given the percentage. 70% is. For India, I'm asking, sir. For India. Only for India. Not... Yeah. Okay. 71% CAGR. 8.1% is juice. 20.9% is water. Okay. Second is if you could also give me a country-wide volumes for FY 2022? By what you're needing? Well, sir, country-wise we give- International ...International numbers. otherwise it becomes too long. Yeah. Just if you could, give me numbers for good performing countries like Zimbabwe, Morocco, et cetera and all, sir. They're all performing well for us. I don't know when you say good. I don't know which one is not performing. They are all performing. We would not like to give individual numbers. Sure. Sure. Sure. Sure. Okay. Thanks. That's it from my end. Thank you. Thank you. Thank you. We'll take our next question that's from the line of Sumant Kumar from Motilal Oswal. Please go ahead with your question. Can you talk about the south market and west market, we acquired, so how is the distribution growth we have done post the acquisition? See, Sumant, just because we are expanding our distribution, that is why you are seeing partly our seasonality changing. If we have grown at 41% overall, our south and west markets are doing as good or better than that. That's a huge growth which is coming, and we are very pleased with our new go-to market system, and we are now trying to slowly get back our market share which we had lost. What works we have done post-acquisition like, say, the penetration in the rural market, or strengthening our distribution or channel and upgrading the software system for the newly acquired markets? What we basically do is increase the number of routes, increase the number of people. If we were theoretically going in a market at 20,000 outlets, we have tried to increase it by at least 30%-40%. If we were going to 20,000 outlets, now we are going to 28,000 outlets. Mm-hmm. Still there is lot of room. We will keep on expanding year after year because we were very under-penetrated in lot of these territories before. Okay. can we assume, whatever the existing market we had, pre-pandemic Or we can say that, prior to the acquisition of west and south markets, the newly acquired market is growing at faster pace compared to that? That's right. Newly acquired markets, which includes east also, is- Okay. Yeah. Okay. Thank you so much. Thank you. A reminder to our participants, if you wish to ask a question, you may enter star and one. We'll take the next question from the line of Sanjaya Satapathy from Ampersand Capital. Please go ahead. Yes, sir. Thanks, and congratulations on a great set of results. Now, you have given the guidance about this distributor business going from 3 million- 3.5 million in this year, 2023. Can you give us a color about what is the speed of the distributor across different region and where the growth will be lot? I mean, let's say West and South, where you are focusing more, how what kind of growth will be. Let me first answer. We are not only focusing on West and South. We are focusing on the full country. We were weaker in West and South earlier, and East also, because these are the three new regions which we have acquired. There is more chances of growth in that area. North has been our original stronghold, so there we were already going to a reasonable number of outlets, which we were not going in the other three territories. We are expanding our distribution in those territories faster than our expansion in the North territories. Yeah. Can we assume that in these new, these territories like West and South and East, your distribution is growing at, let's say, 30%, 40%, while in the North it is growing at possibly around 6%, 7%? There's no 6%, 7%. All the whole country is growing. If I'm growing at 41%, North has always been a very stronghold of ours. We are growing in North also. I would say percentage-wise we are growing, we are putting more focus on East, West, and South. Sir, you had talked about this CapEx plan in your previous quarter. Now, though you have kind of given some color with the specifics, like are you the timeline about your fruit juice and all those, whether they are coming up in July or they are happening earlier, as well as your beverage in segment, whether the CapEx is over, like you are fully ready, geared for your next this year's summer season? Well, we are, we have planned a growth in our CapEx in different lines. What we said, 6 lines and plus Rajasthan and Madhya Pradesh. We will be ready before season. Our juice and dairy, what we are talking, that is for next year. We'll be ready by the end of this year for next year market. By end of this year, though earlier you were looking at something like July or August dates. No, no. I would say by the end of this year we'll be ready. It doesn't really make much changes because we want to be ready before the end of the year for next year. Understood, sir. Understood. You are more than ready for beverages and for this year and for the fruit juices and milk and dairy for next year? That's right. Thanks, sir. Thank you. We'll take our next question from the line of Jaykumar Doshi from Kotak. Please go ahead. Yeah. Hi. Thanks for the opportunity. My first question is a couple of quarters back you called out that there are about 400,000 outlets that sell only Sting and, but no other product... Can't hear you properly. Sorry. Mr. Doshi, yeah, could you please switch to handset mode, sir? We can't hear you clearly. One moment. Please repeat your question. Hello. Is this better? Yes. Hi. Go ahead. Couple of quarters back you indicated that there are about 400,000 outlets that sell only Sting, and there is an opportunity to cross-sell other PepsiCo products to, in those outlets. Can you sort of give us some qualitative color on directionally where that number has moved in terms of 400,000, has it moved to 500,000 or, it stays where it was? I don't have the exact numbers right now, but we are definitely moving ahead. That's why if you see from a 9.6% share, it has gone to 16%. That means definitely more outlets are selling Sting, which they were selling in the first nine months. Understood. As we enter new outlets, we always try and cross-sell our other products. Once you start going to the outlet, once our salesman is going there, he always tries and cross-sell the other products. Understood. That's all. Second question is more of a macro question. you know, there are a few categories where we are seeing a little bit of slowdown, especially in discretionary, and it includes QSR and other segments as well. At a group level, you oversee multiple businesses. Clearly at this point of time, we see Varun Beverages, you know, doing exceptionally well, and your confidence on next year also indicates that. How do you read between these things that, you know, there is some slowdown in some discretionary categories, and where do you sort of, you know, place carbonated beverages? Talk about Varun Beverages, I think, Varun Beverages is doing exceptionally well. When we come to our other business not so long, We'll give you all the information on that. Call on day. When is the next one scheduled for nine? It's not. No, I was just trying to understand. Generally, we get these questions from investors that if there's broad-based discretionary slowdown, why is it not affecting certain segments and, you know. I'll give you 1 small answer for it. Why you don't find lot of FMCGs say that rural is not firing for them. We find it slightly different because, you know, lot of the rural territories didn't have power situation. If you are selling a Unilever or a Colgate or a Dabur or most of the other products, they didn't require electricity or chilling. For us, as the electricity and the power situation is getting better, our BD coolers are reaching and cold drink only sells when it's cold. That is what is helping our rural markets. Understood. That is helpful. Thank you so much. Thank you. Wish you the very best for this calendar year. Thank you very much. Thank you very much. Thank you. Our next question is from the line of Sparsh Jain from Intrinsic Value Compounding. Please go ahead. Yeah. Thank you for the opportunity, and congratulations on the set of numbers. My question is regarding your rockstar product, Sting. What would be its current market share in the energy drink market in India as your main competitor, also launched their energy drink, Charged? If you, if you just can give a tentative idea about that? I can give you my numbers, I think we are doing exceptionally well. They have also recently launched their product. Let us give it a few months, and let's see what happens. We are quite positive on our drink and it is expanding and doing extremely well. Sir, do you have a number regarding that? No, I've given you the numbers in the sense of, our overall. For the year we were 9.6%, and in the last quarter we were 16% of our mix. Okay. Just a follow-up question that, what would be the volume growth of Sting this quarter? The volume of this quarter, we don't know, and we would not like to predict. I see. 16% of our total volume is Sting, so we have given you the total volume numbers for this quarter. No, I'm talking about the product volume growth of Sting this quarter. Not understanding your question, maybe. Sir, I'm asking what would be the volume growth of the product Sting? For when? Do you have a particular number for only this specific product, Sting? I have specific numbers. It's 16% of our mix, and our total numbers we have given you for the quarter. 16% of our total number is, Sting. I'm not asking about the product breakup of your product portfolio. I'm asking the volume growth, the specific volume growth of the Sting. From last year? Against last year's volume growth? Yes, yes. One second. It's about 175%. What would be PAT? Huh? This is quarter four numbers. The quarter four numbers I am giving you, that has been the growth. Okay, sir. Thank you. Thank you. Thank you. We'll take our next question from Devanshu Bansal from Emkay Global. Please go ahead. Okay, sir. Thanks for the follow-up opportunity. I just wanted to check on your remark, when you said, the single serves, operate at a better margin than multi-serves. This remark was at the gross margin level or at the EBITDA level as well? Impact at the gross margin level and other expenses when we reduce flows through to a better EBITDA margin leading to that. Sir, our understanding was that the smaller packs also entail a higher distribution cost. Still, the EBITDA margins are better for smaller packs? There's I don't know where you got the information, but they don't entail a higher distribution cost. Okay. If I, you know, we calculate it on standardized 8-ounce, trade basis. If you take, on that basis, the cost will be, distribution and other things will be the same. Okay. I also wanted to check on Sting, since the competition has launched it under Thums Up brand. Is it that, Sting is also able to take some of the consumers which were earlier consuming Thums Up, and they are also start sort of moving towards Sting? Is this a right understanding? To be honest, it's very difficult to say because, you know, they might be drinking some from PepsiCo, some from Thums Up, some for other products. Overall, Sting is doing extremely well and we are expanding distribution also. Okay. Okay. Got it, sir. Thank you. Thank you. Thank you. As there are no further questions from the participants, I would now like to hand the floor back to the management for closing comments. Thank you very much. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about the company, please feel free to contact our investor relations team. Thank you for this support and for taking the time to join us on this call. Look forward to interacting with you soon. Thank you very much once again. Thank you, members of the management. On behalf of Varun Beverages Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.