Good evening. Welcome to the Colgate-Palmolive Investor Day 2026. I, Aditya Desai, along with the Colgate-Palmolive leadership team, we would like to extend a warm welcome to all of you, those who are present here and those who have joined us virtually. Happy to meet you all again. The session today will be approximately 90 minutes. We will start with presentation from Ms. Prabha, our Managing Director and CEO, and Mr. Jacob, our Whole-time Director and CFO. After that, we will have 45 minutes of Q&A session. Those in the room can just raise their hand, and those who have joined us virtually, there is a chat box option, so you can put your questions there, and we will try to address most of them. Please note that today's presentation may contain some forward-looking statements.
These statements are made on the basis of company's views and assumptions as of this time and are not guarantees of future performance. With this, I would like to hand it over to Prabha.
Thanks very much, Aditya. Good evening, and thank you all to those who are in the room for braving this absolutely wonderful weather and making it all the way to Powai. We really appreciate it, and it's lovely to see all of you here in person. So much nicer to present in person than virtually. To those of you who couldn't make it and have joined us virtually, welcome. I hope we will be able to see and hear you during the Q&A. Jacob and I are excited to share an update about this organization. Before I get into the update, this is really a milestone year for Colgate, whether it is Colgate globally or Colgate India. Colgate-Palmolive Company has been in existence and just celebrated its 220th birthday, a shade older than everybody in the room. Colgate in India has celebrated its 90th year.
We are just actually, as of September, going to head into our 90th year celebration. So two fantastic milestones, and I think what underpins such longevity is the strength of the brand Colgate, and that's really what we are going to spend a lot of time talking about. Okay, so quickly, that's the agenda. We will talk about our view of the oral care category, what's our strategy, and what's the action that we have taken against it. Jacob will then cover the financial performance. We will get into a very brief summary and then hand it over to you for your questions. So starting with the oral care category. We always like to start with: why are we here? As a company, we are here and have been here for 90 years for this one simple reason, which is to help people improve their oral health and beauty.
Sometimes these mission statements are just a statement. In the case of this organization, actually, it is deeply embedded in everything that we do. As we go through this, you will see how this mission comes to life every day. But the context of India continues to be, as far as oral health is concerned, a little bit challenged. The blue boxes on the top are really the incidence of gum disease, of cavities, and of people who are recommended to visit a dentist, 55%, 80%, and 100%. The red numbers at the bottom are really the number of people who actually do something about the problems that they have. Obviously, the gap, therefore, is the gap. As you can see, relatively poor oral health habits in this country means that there is quite a significant gap between the incidence and the actual problem.
This is where squarely sits our job and our brand. So why is this important? Yes, of course, it is great to have a lovely smile like Hrithik Roshan does , and we would all love it, but it is actually a little bit more fundamental than that. There is now a significant link across numerous studies between systemic health and your oral health, oral health being the gateway to your overall body. Those who have diabetes, and we know that India, unfortunately, has a large number of people who suffer from diabetes, are at 2.7 times greater risk of gum issues, and gum issues in turn lead to other systemic issues. It has been linked to many other diseases. Tobacco, this is an obvious one. If you smoke, then your teeth tend to get stained, and obviously that rate is very high. Snacking. We are a snacking country.
Lots of amazing snacks, and we tend to eat, I think, at last count, the average number of meals in urban India, or the average number of times a person was eating in urban India was four and a half times a day. So we are a snacking country. Snacking also increase gum risk because after snacking, you are not brushing your teeth, and therefore it is staying in your mouth, leading to some issues. Sweets, obvious link again. Your mom would have told you. You eat sweets, you increase the risk of cavities. The category today is at absolutely universal penetration. So every household in this country has toothpaste and toothbrush, every household. But the consumption remains low. So if you index India's consumption to the Philippines consumption, urban India is at 0.7x, rural India is at even less, at half X.
The middle box actually is the numbers that matter to us. For those of you who have heard us present before, when I first took over this job, we were talking about 80% of urban Indians do not brush twice a day. I am happy to say that 80% has become 76%. So there is a movement there. But like we have discussed, consumption is not something that moves overnight. You have to keep at it. So there is progress. But obviously there is a long way to go. If you remember the number on rural India, that number was 55% who do not brush daily, and that number has now become 45%. A lot more macro tailwinds working in our favor in rural India. Firstly, the availability of information.
Secondly, the fact that younger consumers have been exposed to the practices of better oral health and therefore brush every day. Thirdly, the rising affluence of rural India. Fourthly, the increasing availability of toothpaste and toothbrushes everywhere. A combination of all of these has meant that that 55 has become 45, which is actually great news, leading to the per capita increases that you see in toothpaste consumption on the right. When we look at toothbrush, a similar story. An average Indian replaces their toothbrush on average once in nine months. This is once in six months in Philippines, and if you talk to your dentist, they will tell you try and replace it once in three months. Both Philippines and us have a long way to go. Again, in urban India, the replacement of toothbrushes has not actually moved a lot.
What has moved is the quality of toothbrushes that is being bought. In rural India, however, the same macro tailwind that I talked about on toothpaste consumption also affects toothbrush replacement. Unfortunately, the numbers there are exceptionally high. This led us to this campaign, which I am going to play.
Bathed in mystery. Blooming with wonder. Blossoming silently in the shadows. Now revealed. The Indianis Dentris.
One of my favorite pieces of, sorry, one of my favorite pieces of advertising, it is actually a Cannes-winning piece of communication. I think what it does, it certainly did it for me, is every time I go to my bathroom and I see the blooming Indianis Dentris, I am reminded that I need to change my toothbrush, and I think that is exactly what it has done for many consumers in India as well. The other lever, so we have an opportunity to increase toothpaste consumption. We have an opportunity to increase the replacement rate of toothbrushes. We have an opportunity to drive premiumization in toothpaste and toothbrush. Our premiumization percentage as a category, so the toothpaste category, about 19% or about a fifth of the category is above the 140 index.
If you take a look at toilet soap and shampoo, those numbers are in order of magnitude 2x and 3x. I think as a community of toothpaste brand owners, we certainly have an opportunity to do more and Colgate can be at the forefront of this. It is an exceptionally important pillar for us, so I am going to spend quite a bit of time on premiumization today. The good thing is that at least we are moving in the right direction. Over the last three years, that number has moved from 14.8 to 18.6, which is reasonable movement, but many miles to go before we sleep.
We discussed how there is a toothpaste and a toothbrush in every home in the country. What makes that possible is obviously a retail footprint that reaches absolutely everybody within, as The Coca-Cola Company world would have said it, an arm's length of desire. The toothpaste store footprint is about 5.5 million or 56 lakh there, as you see the number. Still opportunity for that footprint to keep increasing. Sorry, it is 56%, 8.5 million. Still opportunity for us to keep increasing that because the headroom FMCG universe obviously remains quite a bit and we are the most distributed toothpaste brand. Therefore, if that 8.4 number is to move, then it is a little bit up to this brand.
Like every other category and every other FMCG company in this country, the business is moving towards modern trade and e-commerce, particularly quick commerce. Nielsen data, along with the e-commerce data married into it, suggests that traditional trade is about 80%, modern trade is about 14%, e-commerce is about 6%, and of e-commerce, about 40% sits within the world of quick commerce. This is what we see as our responsibility. Linked to our mission, our responsibility is to grow the oral care category. We believe we have an exceptional right to win in this category for a whole host of reasons. A lot of you would have seen these numbers before, but you have got to indulge us a little bit because we love these numbers, and so they need to be presented again and again in terms of how exceptionally strong this brand is.
67% top of mind. When you ask a consumer, when you think of toothpaste, what brand do you think of? Two out of three consumers will tell you Colgate. When you ask them, what brand do you consider? 90% of them will tell you Colgate. We are the most distributed brand. We reach 1.7 million outlets directly and a 7.1 million total reach, which is the most reach of any toothpaste brand in this country. We have a portfolio that spans across all benefits. Starting with cavities, ending with gums, and everything in between, we have a brand that sits across every single benefit spectrum. You will see that the other players in the category are a bit more choosy in terms of which segments in which they operate.
We are 3 times the size of the second toothpaste brand, and there are segments where we are not number one, like freshness, for example, but we are certainly making inroads with a view to us getting to that number one position. Why does all of this work? It works because every single Colgate product actually is built on a foundation of superior technology. We had the joy of having Abhinav Bindra here on Friday, so he is very fresh in my mind, and he gave a quote which I absolutely loved. He said, "A shot is not shot, it is built."
I think that is actually true of everything that we do here at Colgate. It is not just about putting some paste in a tube, but it is actually built ground up from superior technology, superior packaging that leads to superior consumer experiences. Okay, with that, I am going to shift gears.
That was a little bit about the category. I am going to shift gears into what has been our strategy, I hope, starting, of course, with the first half of the year performance. All of you know this probably in greater detail than I do. I am not going to labor the point other than to say that we are quite happy with the way that we have started the year. Our strategy remains absolutely consistent. This has been the strategy for the last shade over three years. Our job is to grow the toothpaste category, and by growing our core, make sure that we are transformatively taking the opportunity to make premium toothpaste much bigger, lead the category growth in toothbrushes, and build personal care underpinned by a set of key enablers. Starting with leading toothpaste category growth.
The first part of that is about driving category consumption. This is something like I told you that for the last little while, we have been doggedly at it. The 80% - 76% people who brush twice a day in urban India might not seem like a lot, but we are actually feeling very proud that we have been able to at least move this needle. The various things that go towards it is foundational oral health in schools through the Bright Smiles, Bright Futures program. We have been at this version of this program certainly for five decades or more in this country. The Oral Health Movement, which we restarted two years ago after a gap with COVID, in its first year, got about 4.5 million people to take the test of the virtual test on their phones.
This year, we have brought it back, adding a layer of virtual dental consultations, and we have been really excited by the fact that people in the most remote of areas are now opting for a free dental consultation. The Brush Twice a Day campaign. Many of you, I hope, would have been the Don't Go to Bed at Night with Sweets on Your Teeth campaign. I hope you would have seen it. The fact that if you brush at night, you have 50% less chance of cavities. Then we have done a lot of work on rural India and driving behavior change that should read as rural. A lot of effort that is gone into us going absolutely to grassroots. This year we have something new. If I can get my clicker to work. Did I skip it? One second. Sorry, just give me a second.
Okay, I am sure it will come up later. So BSBF, our Bright Smiles, Bright Futures program, like I said, has been running multi-decadal program that is partnering now with eight state governments who have given us access to all the government schools. Last year, we covered about 40,000 schools in that ballpark. When I say we covered the school, it is not just a light touch. It means that we physically went to the school, did the entire program, had the demonstration of what good oral health looks like, gave each of the children in that school a toothpaste and a toothbrush, and a brushing calendar to take home so that they can make sure that they are cementing their habits. In 1,200 of these schools, we also left behind a wall painting that reminds them about brushing twice a day.
Because it is interesting that while 45% of rural India brushes daily, what hides under that number is actually most schoolchildren brush daily. It is now we need to get the schoolchildren to move to twice a day while we get their parents to brush at all. They are actually great bringers of change. I touched upon the Oral Health Movement, 4.5 million people who have scanned the roughly almost 1 billion packs that we have put our QR code on over the two versions of the Oral Health Movement. The little blue dots represent the pin code, so you can see it comes across the length and breadth of India. Over 1 million people have taken a dental checkup. If you remember the number from my first slide, only 9% of people actually go to a dentist.
For one brand to get 1 million people to go to the dentist, I think is quite sizable. We are exceptionally grateful to the 60,000+ dentists who actually give us their time absolutely free of cost. So this is a no-cost activity for consumers, which we are very grateful that they are availing of. Then the brushing at night piece in a little bit more detail. The Sweet Truth campaign that we have discussed already, we had integrated it into IPL of different sweets league or the competition between different geographies and different sweets, and the fact that you can reduce your cavities by 50%. I was excited and told you about this earlier, but I can now show it to you and be excited now.
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We are very excited about this partnership. I mean, very, very credible voices adding their weight to the fact and the need to brush your teeth twice a day. In rural India, we have realized we have tried a few models in rural India. We have realized, however, that the level of intervention that you require to move this in rural India in some communities is actually quite intense. The model that we found to be most successful actually is an almost one is to small crowd contact model. We have gone back, many of you would have heard this many years ago. We have gone back to physical street plays, so where people go from village to village actually doing the street play and explaining it. Then of course we have a pre and post measurement and we are very excited by the outcomes of that.
You will keep hearing us doing more of this. The second leg of the first pillar is to grow core. Three parts to it, superior technology, superior consumer experience, and improving physical availability. The superior technology part, I say it like it is something that is quite simple, but actually this is where the meat and the heart of the Colgate brand sits, which is superior science. If I can just take the cavity one as the example. The inclusion of arginine actually means that in clinical research, Colgate Strong Teeth is better at prevention of cavities and remineralization by a factor of 8x versus the number two player. This is not a minor difference in technology saying it is a slightly better product. This is actually significant clinically proven superiority, which we then package into a product that consumers also believe is superior.
Similarly the case across MaxFresh and Colgate Active Salt as well. There is the consumer experience apart from the superior products is of course the packaging because that is the moment of truth and that is what you pick up on the shelf. I think we have made significant leaps in making our portfolio look more premium and more desirable on the shelf, all of it tested, and then all of that backed up by communication. What we have learnt over the last little while particularly, in the premium space is the use of digital communication, and we will talk about it shortly. Second pillar, going straight into premiumization. We have three key brands that sit here, Colgate Total, Colgate Visible White Purple, and Colgate PerioGard. These are our three key focus for premiumization. Underpinning that all identically the same pillars.
Superior technology, actually the Colgate Total is the most patented toothpaste in the entire world. It is also, and I love saying this, the most used toothpaste by Colgate employees, so maybe they know something. Then we have Colgate Visible White Purple, which is the newest launch. This is a launch that is now a shade under two years. It will be two years in the next quarter. The single most successful innovation of Colgate-Palmolive (India). A toothpaste that has a really simple premise, that on the color wheel purple is at the opposite end of yellow, and therefore when you brush with a purple toothpaste, you cancel yellow giving you whiter teeth. What has been really exciting about driving this entire premium mix is actually the way to take communication to India these days.
Gone are the days where you could put a TV asset and watch it for a few months. Now we have a model that really takes a single advertising idea, breaks it up into mini ideas, and then explodes those mini ideas with influencers, key opinion leaders, and of course brand led communication as well. For Total, underpinned by a cultural platform of sport and for Visible White underpinned really by a cultural platform of beauty arbiters and beauty occasions. This is how it comes to life. So you have a TV asset, you have a multiplicity of social assets and a multiplicity of other touch points where all of this comes to life.
We are very excited about the fact that each of our brands now has a hook in culture that allows it to sit where consumers are rather than becoming an interruption to their lives as erstwhile advertising was. We have really been excited to do the IPL. I am a big cricket fan, so really excited to do the IPL. We continue to do these kind of partnerships and the wedding activation for Visible White is now in year two. This is the outcome. The proof of the pudding is really in the eating of so what? We have done all of this and so what has been the outcome? The purple line is where we started last year with Visible White brand health and this is spontaneous awareness of brand health. When you ask a consumer, what brands of toothpaste do you know?
She tells you Colgate, that is top of mind. She tells you Colgate Visible White, that is spontaneous awareness. It can be a lot of brands that she tells you as spontaneous awareness, but this is without us prompting the brand. To get Visible White and Total to come up spontaneously is quite exceptional. The outcome is that we now grow 5x faster than our key competitor in premium toothpaste. The fun does not stop, or the magic does not stop in this case. We now have a whole range of Harry Potter toothpaste and toothbrushes that are going into market as we speak. The kids version is already in market. The adult versions follow in just a couple of weeks. Then we have all seen the toothpaste tube.
It has been the same tube that we have used for a while, so there is a format innovation as well, which is called the toothpaste pump. Vacuum-sealed, so it makes sure that it constantly gives you absolutely the best flavor of toothpaste. We are expecting to launch this across both adults and kids. In kids, we have a whole new cartoon theme called Bluey, my kids are a little bit older than this, which I believe is quite the rage amongst people who have young children. Then, of course, improving availability, we need to make sure that we are driving it at the right price point.
Both Visible White and Total now have a pack that has been priced under INR 100 at sweet spot pricing, and that is really what we are taking to the indirect trade or to the general trade to make sure that we can multiply the distribution. I am sure most of you shop in modern trade, so an opportunity for us to drive discovery in modern trade. This is actually an area where I feel the execution prowess of Colgate has come to the fore, and over the last three, four years has made material impact to how we appear. Coming to e-commerce, it has been discussed a lot, the ability and the desire to win on screen, super critical for a brand like us.
I am really happy to say, I have said this before, I am going to say it again, really happy to say that e-com for us is growth accretive, margin accretive, premiumization accretive, share accretive. It is a channel that is actually full of goodness on absolutely every count. As we look at quick commerce, we then say that quick commerce is growth accretive, margin accretive, premiumization accretive, share accretive to our e-com business. As channels evolve, actually, we are in a really good position. Then, of course, there is Sensitive. We have discussed this before.
We are very much the challenger here to another brand, but we have an opportunity because underpinned by science, Colgate Sensitive actually has some exceptional technology that works to giving instant relief as well as 24-hour sensitivity protection. Lots of work that has been done on repackaging this, as well as a demand creation platform.
As a result of this, we have just started in January this year. We actually, albeit on a very small base, grow 10 times faster than the sensitivity category. We discussed this the last time we spoke in May on how we are keen to build a therapeutics business. We believe we have a right to win over here. Very recently, actually, this is, I think, really hot off the press. Colgate is the only brand that has been certified by the Indian Society of Periodontology or the people who manage gum disease. We are the first people to get this seal, the only brand to have this seal on our PerioGard brand. We are using this along with the fact that we have an outstanding regimen of paste, brush, and mouthwash to ensure that we drive prescriptions.
For this, we are doing a massive amount of investment in both sampling as well as increasing our feet on street or increasing our oral care experts who go to dentists. I come now to the third pillar, which is leading category growth in toothbrush. I start with a number that I hope now. We are the number one toothbrush brand in India. We play across a range of price handles. It starts at INR 10 and ends at our most recent launch, which is the INR 299 Colgate Total Toothbrush, and everything in between for every benefit segment in between. Like I told you, we are seeing an uptick in volume in rural India because people are replacing their handles more often.
In urban India, we are seeing our ability to drive people up this pyramid because the growth in the premium and super premium segment far outstrips the growth in the value and mid-tier segments. Given that most people keep their toothbrush for nine months, a INR 200, INR 300 investment actually on a monthly basis is not that much. Here are some of our key actions on driving toothbrush growth. Value tier, mid-tier, obviously, availability is the answer the wider we get, and there is still a gap between toothbrush availability and toothpaste availability in this country. The wider we get, the better. Regimen is a great opportunity for us. Every premium toothpaste of ours has the matching toothbrush that makes the regimen work.
Children remain an opportunity, also because children are just learning how to brush, and the better the quality of their toothbrush, the better the quality of their oral care outcomes. Lastly, I come to personal care. I must confess that this has been an area of disappointment. We have not done a great job with Palmolive. There are some green shoots, one of which is that we now lead the premium hand wash segment, which is great, but it is a relatively small segment, and we have an opportunity to grow it.
We have recently entered into a partnership with Bombay Shaving Company to help make sure that the two of us can work together to build the digital presence of Palmolive body wash and to make sure that we are taking the learnings that has made Bombay Shaving Company so successful into Palmolive to help us to grow this brand. I hope that as we go forward, we will have better and better news on Palmolive. That brings me to the end of my section on the strategy. I am going to hand it over to Jacob to cover the financial performance. Thank you very much.
Thank you, Prabha, and good evening, everybody. A quick glance back at what we achieved in the first quarter. Our sales was INR 1,591 crore, which was 12%, and that means for the first six months of the calendar year, we are 10.5% ahead of our oral care peers. Profitability at INR 343 crore was up 10.6%, excluding one-off on a comparable basis. So this excludes the ideas GST impact and some restructuring impact. Profit after tax at 22.3% is at very high levels. In terms of driving efficiency, building best-in-class profitability. You will vouch that we have among the best financial ratios in the industry. We have achieved this through continuously strengthening our margin profile, driving efficiencies through funding the growth program, which I will cover in a moment, and stepped up brand investments.
Our balance sheet continues to be as strong as it was ever, bolstered by efficient working capital and our net working capital continues to inch further lower in terms of the negative percent to sales and sustained cash generation. In terms of shareholder returns, our return on capital employed continues to inch upwards. Our dividend payout has been consistent over the years and, since listing at 22% CAGR, we have given very good returns to the shareholders. If you look at our margin profile over the last few years, if you take the first block, FY 2021 - FY 2023, we are in the 65%-68% levels. If you look at 2024 - 2026, is 69%-70%, and Q1 we reported 69.7%. How did we deliver this?
Identifying manufacturing efficiencies, localization of sourcing that is replacing imported material with local material, automation initiatives at the plant and right through the supply chain up to the warehouses, and favorable product mix. At the same time, while we have garnered all the savings, we have also invested a lot of it back through product superiority. Prabha talked about the arginine formula for CDC, our MaxFresh formula was upgraded, our Cast formula was upgraded. We continuously continue to keep our formula clear of eyeball competition.
Our trade and consumer spends at the same time have been competitive, and we have also been contributing to the ESG piece, not lip service in terms of compliance with what the government needs us to do, but going beyond that. We talked about the recyclable tubes, 100% now technology that we have developed, and we have opened it up to competitors free of cost now.
This is the funding the growth program. As gross margin savings, we get between 4% and 5%, and this is something that is muscle memory to this company, right? People across the chain, whether it is marketing, sales, not just supply chain, finance, everybody talks about efficiencies. Every day when they come to work, it is always at the back of their mind, how do we find an additional INR to put back into the business? What it has allowed us to do is, with our margin profile and our profitability, we have been investing on our business and we have invested significantly behind our premium business, and you can see it is up 2.5x as a percentage contribution to overall toothpaste sales. We are seeing a great level of elasticity here. The more we invest here, the more uptick we are seeing in terms of incremental sales.
What we have done recently, a lot of this increase in advertising, you saw 15.8% we reported, a lot of the incremental is going into the premium portfolio into new channels. We will continue to invest here with the upward bias, given the returns we are seeing. It gives us a good leg to further accelerate growth in our business. We think it is the right thing to do, plow back some of the savings that we have got from higher margins and higher profitability into growing our premium business even faster than the level at which we are growing. You saw Q1 was INR 252 crore in advertising, which was 34% up year-on-year. Again, just to illustrate the same point, our EBITDA is 500 basis points clear of the nearest competitor, if you look at that chart.
What this allows us to do is make that call on investing and growing faster or continue to grow at profitability at a higher level. Right now, we are making the call that we will invest more and grow the business faster and accelerate it. I covered a bit of this in the balance sheet section. Cash chain continues to improve. The last financial year, it was INR 1,800 crore. Working capital, we have always been at negative, but FY 2026 we ended at -15%, and this frees up a lot of cash for us to plow back into CapEx or remit as dividend to our shareholders. In terms of enhancing shareholder value, our return on capital employed stable at the 121%, among the highest in the industry again.
Our dividend payouts have been consistent for all the last few years, and we have returned INR 10,000 crore in the last 10 years to shareholders. To sum up, our objective going forward, our goal would be to drive growth ahead of profitability. We have been investing at higher levels than the historical levels. We are seeing good elasticity in the premium business, and we are going to double down in that area. We are going to step up investments, drive consumption, drive premiumization, and at the same time, the focus on strong governance and value creation will continue. Thank you. With that, I hand it over to Aditya to chair the Q&A section.
Thank you, Jacob. We will start with Q&A. Just allow us a few minutes to set up. I would request Prabha and Jacob to come on stage, please. Thank you. We will start with the Q&A. We will first begin with the questions in the room. We have few questions, but we will start with Abneesh. Can someone please pass on the mic?
Yeah. Thank you. I have two questions. My first question is on the year which went by. So last two quarters we have seen very good improvement. Prior to that, the competitive intensity in the sector was very high. Can that come back and derail the last two quarters' strong outperformance? Because generally, it is very easy to copy-paste what you are doing with other players. So what can prevent that from our side? Second is, when I see Sensodyne, INR 2,000 crore CapEx.
Their whitening toothpaste currently very high advertising, and I think they are very differentiated because you, the other player, all are violet, packaging similar, toothpaste similar, but Sensodyne whitening toothpaste is different. It is actually looking white also. Plus, I think their overall connect with chemist is also very good, just like yours. So your thoughts on growth and market share in the whitening part of the toothpaste.
And third, of course, is in terms of Sensitive. Although you are very under-indexed versus the market leader, why it is not in the top three premium focus? Is it because it is too small? See, ultimately, you cannot take everything as topic. So I just wanted to understand. That is my first question.
These multi-barrel questions. Sometimes I need to write down. You guys can hear me? Now you can hear me?
Yes.
Perfect. Sorry. These multi-barrel questions, sometimes I got to write down to make sure that I don't forget. Starting with last year. I don't think our last year's performance, which was very subdued, was a function of competitive intensity. Actually, our last year's performance was more to do with the fact that we saw a significant slowdown in the urban markets in the first part of last year, which actually led us to a lot of the interventions that you saw in terms of superiority, the work particularly done on things like Colgate Strong Teeth and MaxFresh, which are significantly paying off dividends now. I don't see that competitive intensity has either gone up or gone down. This is a great category to be in, and people are giving it their all. To your question on Sensodyne whitening.
Actually, when you own a segment, it's a good idea to have more competition come in and talk about it. Whitening penetration in this country remains around the 2% mark. If you see other countries, and let me take the U.S. as an example, whitening toothpastes, I think, are about 20%-25% of the market. So penetration obviously will be order of magnitude higher. When we see more people come into the whitening market, and it's not just the competitor that you named. It's pretty much everybody who's attempting to bring in a whitening toothpaste. What it will do is serve to grow the market. As you can imagine, our shares in whitening are massively ahead of our overall shares. Massively ahead because we were the pioneers in this segment. I think Colgate Visible White kind of defines the segment.
It's not a bad thing when somebody comes in and attempts to help us to grow the segment. Are we worried? No, I don't think we are worried. To the last question on sensitivity, where we actually absolutely play the challenger role. I think the interesting thing about sensitivity is that it is a problem solution. It's the kind of product that you use when you have a problem, you're looking for a solution, and there is a finite limit to that problem. Because it's not everybody in this room who suffers from sensitivity and therefore looks for a sensitivity toothpaste. So in that finite problem solution space, for us to be able to carve out a portion of that, I think is absolutely a viable proposition. But in terms of priority for us in premiumization, Colgate Total, Visible White, and PerioGard remain our key priorities.
This one we see as a challenger opportunity.
One quick follow-up on this. Sensodyne earlier in India and globally was owned by pharma company and now by Haleon. I wanted to understand in terms of the chemist touchpoints and the referral by the dentist, how over-indexed or under-indexed will be versus with that player?
I think you might want to ask that in Delhi. I am going to not comment so much on what they do, but I am going to give you a perspective on what we do, and I think we still remain the number one dentist-used toothpaste in India. We have actually, over the last little while, significantly increased our feet on street to drive the dentist advocacy. We have a robust multi-year partnership with the Indian Dental Association, and that is why we get, in the Oral Health Movement, 60,000+ dentists generously offering their time. Now we have the ISP seal of recognition for PerioGard as well. I think from a dentist and Colgate relationship perspective, I think we are in a really strong position.
I think the team does an amazing job, and it is actually going from strength to strength, both in terms of investment and in terms of the outcomes that we are seeing.
Sure. Last quick question on Palmolive. You were candid enough on not being satisfied. I wanted to understand here, will a D2C acquisition help? What purpose Bombay Shaving Company is serving here, because they themselves might be having some level of a challenge in the current context. Second is, in your read, when you tried on your own, without this tie-up, what was the lacking thing? Because clearly differentiated product and premium products.
I think our learning has actually been that the flywheel of a D2C brand is slightly different from the flywheel of the kind of brand that we are used to doing. We did try it on our own, and honestly, I don't think we were best in class. We like to be the best in class at pretty much everything that we do. From what we are seeing of the partnership so far, and it's early days, we are very optimistic about what Bombay Shaving Company brings to the table. Already early green shoots in terms of performance, and like I told you, it's a very nascent partnership. I'm optimistic. Also, as I said before, it comes off a base that we are not happy with as a company, and there is miles to go. I think the early wins will be easy.
We'll see where it goes in the next two, three years. But right now, optimism is very high.
If you could clarify what they are bringing to the table. They are handling the media spends.
They are actually handling the entire brand for us at the moment, end to end.
Thank you. Before we take next question, I will just request participants who have joined us virtually, please type in your questions in the chat box and we will try to address them. For the next, we will go with Mihir.
Hi, Prabha. Hi, Jacob. Mihir from Nomura. Thank you for taking my question. Firstly, congrats on tying up with KBC and getting Harry Potter, both for kids and adults. I am looking forward to it. Firstly, while the category has seen universal penetration, there seems to be still significant headroom opportunity in both premiumization and per capita consumption. Firstly, on premiumization, one has the tailwind of quick com, eCom, which is relatively very accretive for the business any which way. But when you see the contribution is still at 6%, versus many food categories we have seen eCom contribution going upwards of double digits, et cetera. What more can be done here? I understand the products are any which way there in place, and largely distributed, but is there anything else that can be done to accelerate this?
On the per capita consumption bit, you have a very large Bright Smiles, Bright Futures program where you are tapping into a very large newer consumer set in the rural areas. Any sense you have, with dual brushing, for rural kids, how much adoption has that happened there? What do you think are the thoughts as this generation comes in, what can we think about the contribution to the overall? That is question number one.
I am going to take the first part first. The 6% contribution of e-commerce is actually market. It is not us. Our contribution is actually double digit. Just a shade over, early double digits actually. That is why it is share accretive, growth accretive, et cetera, that I mentioned. I think we are in a good position. We are actually driving this forward. What e-commerce, quick commerce allows us to do actually is the discovery of products that we will not be able to distribute across the 1.7 million outlets. What you mentioned, the Harry Potters, the pumps, the MaxFresh has a sensorial range, which includes watermelon and rainbow toothpaste, et cetera. All of that, what e-commerce, quick commerce allows us to do is to drive discovery of that.
When we see it get traction there, we are then able to travel it into the modern trade environment. On per capita consumption, to your question, we do not at the moment measure dual brushing or twice-a-day brushing in rural India. We think we have a massive enough task of getting everybody to brush every day. Really excited to see the 55% becoming 45%, which I think is a fantastic. I mean, 10% in three years is quite substantial on India's rural population, so quite a dramatic improvement. I think our first job will be to get near universal brush every day before we start measuring the twice a day. To your point, the Bright Smiles, Bright Futures program, when it teaches oral health, one of the pillars is brush twice a day. We do expect that some children are hopefully taking home that habit.
I do not have a measure of it.
Understood. Secondly, Colgate's reach and brand equity is relatively quite strong. Any thoughts on how one can leverage that by getting into some mass market subcategory in personal care? I know that probably getting into a mass market category can be margin dilutive, but I just wanted to know your thoughts around are you open to entering in or getting into maybe like just an example, mass market soaps. Significantly large category can be touched upon. Yes, diluted, but it can bring in a lot of growth, which is what the country gives you. Your thoughts around that?
So, a two-part answer. If you mean with the Colgate brand, then I must tell you that I had an interesting story that when I first walked into this company, there is a poster of something called Colgate Lasagna that got launched, I think in the U.S. some many decades ago. We are very much as Colgate, though all joking apart, we are very much focused on oral care. So Colgate will be an oral care brand. If you are asking me, is there potential for us to get into other brands in this country from the global Colgate portfolio, I have said this repeatedly that I think the answer is yes. As this trajectory and performance continues in oral health, I do imagine that we will see more.
Understood. That was more specifically on the mass categories, not on getting it from the global.
I think there are opportunities for us in categories that make money as well. I am not sure we necessarily need to go into the low-margin mass category. That is not necessarily the direction we would travel in. But there is enough opportunity. We are a relatively limited portfolio company, so there are enough opportunities in categories that have the opportunity to make money.
Understood. If I may just ask one to Jacob. Jacob, if one looks at the past couple of years, the quarterly volume growth trend, for a category which is significantly higher penetration, a daily consumption category, the volatility is a bit too much for one's comfort. We have seen high single-digit growth, we have seen early declines and now again coming back. With everything that Prabha highlighted what she is doing, how should one think about a steady state growth on volume side for a medium term, for a category? And maybe in the near term also if you can talk about, you have a significantly lower base that you will start lapping now. So should one expect higher growth in the near term because of that?
See, the category growth over the long term has been a bit soft. If you look at the last five years or even a little bit longer. The growth has mainly come from pricing over the last few years, right? It could have been one year up and down, but if you just smoothen it over time. We are now looking at a much more balanced growth, which is not entirely price-driven, but more balanced with volume and mix. Mix would mean premiumization, and you saw we growing at 6x, and we need to continue the premium growth because ASP is 2x, 3x. That is one way to grow the portfolio, the same unit pack that a consumer buys, they are paying much more and therefore the sales growth, right? That would need higher levels of sustained advertisements across channels, digital, TV, et cetera.
That is what we are focusing on. What we are saying is that we will deliver higher levels of growth, but it will be a more balanced mix of these three than you have seen in the past.
Thanks.
Thank you. Wishing you all the best.
Thank you. Next, Amit.
Yeah, hi Prabha, I have a small question on the growth template that has emerged. First of all, congratulations on return to double-digit growth. I assume that sort of a template that you would like to follow, staying in double digit, because that should be the kind of growth that consumer companies should deliver in India. My assumption is that, having covered it for a while. Now, if I sort of double-click on that expectation and I clearly see that premium side is doing very well. If I assume that it is mid to high single digit, even if it is growing 20%, it can add about 2% to the overall double-digit expectation. But despite doing exceptionally 20% kind of growth, I just do the rough maths. Then comes in pricing and mix.
Unless pricing is part of equation, the double-digit expectations become still elusive because category volume will be two, three, four. You can have good cycles and bad cycles. Now, with A&P going up, QC supporting you, which is margin accretive, growth accretive, urban doing better than even rural, if I look at the last presentation. Is it safe to say that rising in A&P, consistent 4%-5% pricing and delivering that volume and then mix improving, is that formula that you have discovered that double digit is here to stay with that template? Because we have seen past patchiness. Having done that for price increases, do you feel comfortable in that template now? Should one make that expectations as double digit is here to stay? I just would like your thoughts on that.
I think, I just want to maybe talk a little bit about premium because I think when you peg premium at 20% growth, you are actually massively under-pitching it. There is significantly more opportunity. We talked about the fact that in the toothpaste category, only 19% of toothpaste sits at the above 140 index, and that number could be anywhere between 40% to 60%, even if we take a look at the shampoo, soap, et cetera, categories. We are also seeing that our premium business is growing 6x the market, so much faster than the levels that you were building into your model. But your model at an overall level actually is right, which is that we have found a way of delivering a balanced growth between mix, volume, and price, like Jacob talked about.
And that is exactly the model that we will continue to drive as we go forward. That will be the focus where the volume will come from us ensuring that we keep our core brand superior and competitive, because that is where really the volume comes from. Mix obviously comes from the premiumization part. Then of course, pricing, there will be good years on pricing, and there will be not so good years on pricing depending on what competition does, what inflation does, what the market overall does. So that will then become the third leg of the wheel. But if you are looking to me to give you a comment on exactly the amount of growth, we never do that. Not going to start now, but that is absolutely the formula.
I will just hope that you do double digits. We are well-wishers on this side.
Thank you.
Yeah. My second question, Prabha, is on, for example, last year when I was here in this room, you showed a slide where a lot of international brands were kind of shared that this is the kind of portfolio we have, and it sort of signaled an expectation that some of these are coming and maybe in a one-year or two-year timeframe, but not much progress has been made or at least narrative has not been built by you. Why is this the parent not interested or you feel it is not required to do it at this stage?
Because QC, e-com, and D2C, so a lot of excitement is being built in BPC or at least many other categories. And why would Colgate not want to participate in it when every new company which had no right to exist also they are building INR 1,000 crore brands. I am just surprised.
Amit, I think that's a great question, and I'm just going to say that I don't think it's a matter of either the parent or us not being interested because both parent and us are very interested. It's just a matter of the right timing for us to do this in the context of everything that's happening with oral care and with Palmolive. So it's more that than a case of lack of interest.
But do you have any sort of timeframe when such things could happen?
Not one that I can share here.
Okay, fair enough.
Thanks, Amit.
Thank you.
Natika.
Yeah. My question was actually just to get more color from you on this arrangement with the Bombay Shaving Company. If I recollect correctly, I think the parent invested into that company, and you just mentioned end-to-end Palmolive will be managed by them. If you could throw some more light on what the arrangement looks like, and if you could also share anything on financial terms, how this is going to work. The second question also let me just add is to Jacob. You mentioned that growth is going to be ahead of profitability. Are we kind of calling out that we should be prepared for operating margins to moderate from FY 2026 levels? Thank you.
Yeah. On the second question first, we expect gross margins to be in the range, but EBITDA would be a function of what we going to invest. We invested at the high level of 15.8%. We have seen great growth on premium. We going to double down there. So the bias here would be on higher advertising and EBITDA percentage may be impacted. We are not working towards any particular level of EBITDA. But as I said, the advertising levels in the short term, we should expect it could be going north. The monitorable would be the premium growth because that's where really we think there's an opportunity as the most elastic form of demand that in that segment is the most elastic, and that's where we are going to double down.
I just had a follow-up. You do not expect benefits of operating leverage to kind of be there to support your operating margins?
Yeah. So, you are talking gross margin or EBITDA?
No, I am talking about the operating leverage if you get with the higher growth, right? Because you are so cost-conscious, you just talked about like almost 4.5% of savings, gross margin is going to be pretty healthy. So I was just trying to wonder whether there is enough scope for Or unless we are thinking about the 16% range also to step up from here.
Yeah, as I mentioned, there would be an upward bias even on the currently reported quarter advertising numbers, and therefore in the short term, we are not going to be held by the EBITDA levels, target a specific level. If we think spending X more on Total and Visible White is going to give Y growth, then we are open to doing that. We are not going to be concerned because we believe this is the way we build brands. And, while in a few quarters we may be a little bit short on some of those ratios. Over the long term, we build brands, we know how it takes time to stick. Premium brands backed by technology like the technology we have on Total. Once consumers start using it over and over again, they will be habituated to use that.
So, we are doing it a little bit for the longer term, and therefore while we will continue to maximize all the efficiencies that a company of our size offers. At the same time, we think sometimes we may need to still invest further ahead of the curve.
Understood. Thank you.
And if I take your Palmolive question, what I mean by end-to-end is really all the consumer-facing advertising and the customer relationships on Palmolive is being handled by Bombay Shaving Company. The innovation, the product quality, the supply chain, all of that remains with us. And so why we are looking to leverage this partnership, like I said, is because we believe that they have a better understanding of how this entire D2C flywheel works. It's not a flywheel that we understand as a company, so we're looking to learn from them, and that's why we've entered into this partnership.
Yeah, just to add to that, when we mean end-to-end, it's for e-com and D2C only. So modern trade, traditional trade, those will stay with Colgate. We continue to manage that piece, traditional advertising, all that stuff will be ours. They would do only the e-com and the piece on D2C.
Thanks. We will take the next from Jai.
Hi, this is Jai from Kotak. Thanks for the opportunity. I have got a couple of questions. First, a bookkeeping one. Could you give us your salience for modern trade, e-commerce, quick commerce channels? Again, if you can share once in a year the salience of premium, because x to 2.x, 5x, if you could actually share actual numbers.
We do not typically give the. So what we showed was the Nielsen numbers where e-com, direct modern trade has shown us like 50%.
But those numbers are incorrect, right? It was 6%. If you are 50% of the market and.
Correct
It means that others are zero.
Correct. As Prabha mentioned, we have crossed double digit on e-com as a contribution. We do not call out the splits because that is internal. We normally quote Nielsen, but you are right, the numbers are a little bit different there than what we are seeing internally. E-com we have called out would be in the.
Modern trade, if you can share, because again, how do we. See, those numbers are not reliable anymore. It was relevant a few years ago, but basically that is why we are requesting you for your.
Yeah. Further splits, we are not calling out.
Okay. Premium, if you can share.
Yeah. We said we are growing at 6x of the core brand, so you'll have to.
On a lighter note, sir, if you don't share any data, it's difficult to write a one-page note sometimes. Anyway, last one, and I hope you can share some qualitative color. See, when you started this journey, it was 12%, 13% A&P spends. Today it's almost 16%, right? So can you give us some qualitative color on how A&P has moved from traditional to digital? How much of your A&P is for the programs that you continue over years, and how much of your A&P today is directed towards the premiumization journey?
I think if you see the way A&P has evolved, and this is I'm sure true of pretty much every company, what we are seeing is a steep drop-off in TV viewership, and therefore our consumers, particularly at the top of the pyramid and the bottom of the pyramid, neither of them are watching television. One, because it's so much easier to access their phones at the bottom of the pyramid with an electricity always on, and the phone is always available, and everybody now has a phone. At the top of the pyramid, obviously, they're just opting out of advertising, and so they're moving into non-advertised sources. These two sets of consumers are now almost entirely reached by digital. The middle continues to watch television, and we continue to advertise particularly our core brands to this middle India on television.
If I was going to give you some numbers, I think we are about roughly 60% of our money now goes behind digital, and the remaining behind television. A significant proportion of our money actually goes behind premium, far in excess of the size of the business. So premium tends to have advertising ratios that are in the ballpark of 50%, 60% of our business being plowed back into advertising, which gives us the flywheel to allow us to generate the 6x growth that we are talking about. Our ongoing programs, that is ring-fenced investment, and that grows steadily year-on-year to make sure that we can continuously reach more and more children. So last year we reached 12 million children, and I am looking at Shilpa to keep me honest on this number. So 12 million children that we reached through the BSBF program.
The previous year, it was 10% less than that. This year we expect it will be 10%, roughly more than the 12 million children. So that for us is a non-negotiable ring-fenced spend that doesn't move. The way we deliver that investment could move, but the spend and the reach just increases because it is the right thing to do.
Sure. Sorry, I didn't understand 50%, 60% in premium. So what is that number? It is higher than.
50%, 60% of the turnover of premium is the A&P on premium.
Oh, wow. Okay. Thank you.
Thanks, sir. We'll take next from Aditya.
Yeah, hi. Thanks. Aditya from CLSA. Just one question. In terms of increasing the gross margin versus a higher spend on A&P, and particularly now that you said about half of that higher spend is on premium brands, would it just make more sense to cut price for the premium brand? If not, why not?
Okay. Firstly, I just want to make sure that we are understood. I didn't say we spend half our money on premium. I said that premium has an A2S ratio in that ballpark, so not the same thing. I think the joy of selling a premium brand is that you deliver value at a premium, because otherwise you will just cut the price of everything, and everything will be the same price, right? So the logic is that the consumer sees value in a better proposition and a better product, which allows her to pay you more money, and that's why pricing is a lever on our premium business. It's not the only lever on our premium business. In fact, we are seeing in toothpaste the opportunity to pull in the other direction.
If you see in toothbrushes, for example, the cheapest toothbrush being INR 10 and the most expensive toothbrush being INR 300, that's a 30x multiple. We don't have a 30x multiple in toothpaste, but there are consumers who have the desire and the wherewithal to pay more money for more benefits. Actually, the intention is to push in the other direction, which is to make sure that we are constantly innovating so that we get more and more benefits that are worth paying more money for.
Understand. Very clear. Thanks.
Yeah.
Hi, good evening. This is Harit from Investec. Just two questions. The first one was on distribution expansion. Your oral care slides mentioned that the category is still under-indexed on distribution, and distribution is still moving up. Also, you are adding premium, you're adding more products to the portfolio. Yet our direct reach has been in the same ballpark, 1.7 million over several years. I just wanted to understand whether there is an actionable trigger here in terms of growth in distribution, or do you think that 1.7 can still. It's more throughput per store than anything else that can drive. Just is distribution expansion in terms of direct or any other reach a lever for growth? That's my first question.
I think the answer is a kind of a qualified yes. Because if you see our premium business, it will, in the first instance, go to these 1.7 million stores. Because these 1.7 million stores are the cream of the entire retail universe in India. Having said that, if you see the way India is evolving, particularly these city-to-city corridors, you see where urban adjuncts or urban agglomerates are increasing, like where Mumbai ended couple of years ago and where Mumbai ends now, or any other large city. You're seeing the expansion and you're seeing consumers, again, who have the ability to buy, for us to reach the service to store directly, and therefore higher quality retail that is available there. That's where we will be judiciously adding coverage. It's not a blanket, let me add coverage across the entire country.
But we're definitely seeing opportunity in urban agglomerates and the city-to-city corridors that are getting created across the country.
Got it. The second question was more of on ground kind of question. Over the last decade, you saw this naturals category really pick up and Ayurveda, herbal, et cetera. Over the last, say 12 months, 18 months, even in D2C or last two years, we're seeing science-backed being a larger share now than herbal, Ayurveda, natural. Your premium products are also doing exceptionally well. Obviously, you're driving that. Just wanted to get your sense when you look at the competitors who you don't play in that category, but just your feedback on how is the consumer moving back to kind of more science-based as compared to Ayurveda, herbal, natural? Is that a trend you're starting to see? Just some feedback on that.
I think, I've always been a firm believer in the fact that consumers buy benefits. Just a product having great science or great natural credentials doesn't make that a benefit. She wants the product to do something for her, fresher breath, whiter teeth, prevention of cavities, stop my gums from bleeding, what have you. I think the company that convinces her that the offering that they have delivers to that benefit will win. I don't think it is about whether the source of that delivery, where it comes from. So that's always been my belief. I think what we found as we have got the mixes right on Total, Visible White, PerioGard, is that that is absolutely coming alive.
As we tell the story correctly, as we talk to the consumers about the superior science that these products have, and most importantly, as these products deliver in her hands, that makes all the difference, and that's why we are actually seeing a resurgence here.
Thank you.
Thanks, Harit. Prabha, there are a couple of questions on the chat box. What is the demand outlook amid deficit monsoons and commodity volatility? Are we going to take any more price hikes? Have we seen any demand softness in the rural areas?
These kind of macro questions, I always look at Jacob, so.
Yeah, Jacob.
We don't know how this is going to pan out. There is the headwinds of inflation. There is a lot of stuff happening on macro. We've delivered good growth in the last few quarters, and we continue to see good growth coming in. We believe it's also because of all the stuff we are doing on our communication, the premiumization, the upping of advertising, all this stuff. Inflation will be an issue, and we also keeping a close tab on pricing. We've taken around the low single-digit level of price increases in the last little while. We will keep an eye on costs because gross margin is something we are looking to keep in the range and not let it slip by given the advertising investments we are looking to do.
We are going to look at this very closely and definitely not look at increases every few months, et cetera. We know in all line of businesses, and given traditional trade is a big part of our business, you need to space out price increases, et cetera, and all that learning from the past we'll incorporate as we address some of those challenges.
If I can also add that I think one of the things that we've taken rightly a decision on is to ring-fence the most vulnerable consumers. With GST, we had the opportunity to increase grammage on our INR 10 and INR 20 SKUs. We actually increased the grammage by more than the GST cut, making sure that we are softening the blow for those consumers who buy price point packs. Even within the face of this inflation, we continue to hold that grammage, and as a result of which our INR 10 and INR 20 actually now offer fantastic value, which I think is important at the other end of the pyramid as much as we look to drive the top end towards premiumization.
There is one more. It seems that Colgate's marketing investments to improve brushing are helping other players. How can you ensure that benefits remain to you?
I am not sure where the source of that data is going to come from but I am going to tell you our, I think, a philosophical answer and a real answer. I think the philosophical answer is that our mission is to improve the oral health of this country. And we will take the necessary steps to do that, whether it is brush twice a day or Bright Smiles, Bright Futures. The less philosophical answer, I think, is that if you take a look at growth over the last little while, maybe the numbers there are not quite true.
We will take last one from Avi.
Hi, this is Avi here from Macquarie. Hi. Just wanted to kind of understand your perspective on the premium side because you did highlight that you believe that the consumer looks at benefits. Do you see this- When you look at this premium segment, right now you have three bets, but is there an opportunity across each benefit case that one should look at from a premium category over time? Is that how you see the premium category? And second, if you could share your thoughts on how do you see it from an urban-rural perspective or a channel perspective? Is this largely e-comm or largely urban, or any thoughts over there would be helpful. Thank you.
Sorry, could you just help me to understand the first part of your question better?
See, when you say a consumer looks at it from a benefit perspective, right? Then logically, the consumer buying decision is from a benefit perspective, is how you see it. Then is it fair to say that over time this premiumization lever would be along the benefit use cases? Is that a right thought process, and hence would you see this as an opportunity going forward versus what you have, or no? Your thoughts on that would be helpful first. Second, as I said, from an urban-rural, how do you kind of look at that? Thank you.
I think, do we see this as a benefit-led opportunity? The answer is yes, and that's why if you see our three focused premium plays, play in three very different spaces. There is the everyday prevention that is Colgate Total, which is meant to be absolutely family everyday toothpaste. There is a whitening toothpaste which delivers all your basic dental health, but the spike is on whitening and therefore, if you are looking for something that's a little bit more outward, then you're going to sit in that segment. Then there is PerioGard, which is again problem solution, which is that if you have gum issues, which unfortunately many people in this country do, then that is the toothpaste for you. We are seeing them as three independent benefits. Could there be other premium benefits? Of course, there could. Could those benefits come?
Of course, they will as well. But for now, in terms of prioritization, this is where we are prioritizing the benefits. In terms of the consumer space, of course, premiumization higher in quick comm than e-comm, than modern trade, than general trade. That's the hierarchy of the way it's going. But what's interesting really, is that unlike the earlier India where all of this would start in the metros and percolate its way down, what we are seeing is that this is quite democratic. We are seeing the uptick of premium in Tier 2 towns. We are seeing the uptick of premium in rural villages. This is really aided by the fact that physical reach no longer needs to be there in that town for consumers to be able to access this benefit.
The fact that the phone allows us to, or digital allows us to communicate to people almost on a one-on-one basis. I don't have to do an entire state to get to a certain audience. I can just get to the audience that is more likely to buy premium. We are certainly seeing a more democratized desire for premium, which we are then able to fulfill through some of these channels.
Got it. Thank you.
Thanks. I know there are some more questions, but you can connect with me and Niti separately, and we are happy to answer all your questions. That was the last question, Prabha, so any closing remarks?
I am going to stand because I am tired of sitting. I want to thank you all for coming. I want to just reiterate the position that Jacob left you with, which is that we are very pleased with the way the business is progressing over the last little while. We do think that we found a space where our key priorities are being able to be delivered in the way that we would like it to be delivered. The key messages that he left you with, which is the great governance of this organization will continue, and we intend to drive growth ahead of profitability as we go forward. Thank you again for making the trip. It has really been a pleasure to have all of you here. Thanks, Jacob.
Thank you.
Thanks, Prabha. Thanks, Jacob, and thank you all for your time and good interaction. I would also like to thank Prabha and Jacob for all your time and sharing your thoughts, and Shilpa and the entire team here for this wonderful event. Monica, thanks for the presentation. I request you all to collect your smile hampers outside this room, and please do share your feedback. Thanks again for your time. Thank you.