Ladies and gentlemen, good day, and welcome to Emami Limited Q1 FY2025 earnings conference call, hosted by IIFL Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Percy from IIFL Securities Limited. Thank you, and over to you, sir.
Hi, good evening, everyone. Welcome to this Emami conference call for Q1 FY25. I have on the call with me Mr. Mohan Goenka, Whole-Time Director and Vice Chairman, Mr. Vivek Dhir, CEO, International Business, Mr. Gulraj Bhatia, President, Healthcare Division, Mr. Manish Gupta, President, Sales, and Mr. Rajesh Sharma, President, Finance and IR. I'll hand over the call to Mr. Mohan Goenka for his initial comments, and then we'll open up for Q&A. Over to you, sir.
Thank you, Percy. Very good afternoon, ladies and gentlemen. Thank you all for joining us today. It's a pleasure to have you with us as we reflect on the performance of the past quarter. As we celebrate 50 years of Emami, commemorating 5 decades of delivering happiness to consumers across the globe, I am happy to announce that this milestone year has begun on a positive note, marked by sequential improvement in demand trends and fructification of our strategic initiatives. Our resilience and innovative spirit has been the cornerstone of our success, driving us to achieve commendable performance and setting the stage for a bright and prosperous future. Rural demand showed gradual improvement, with slight green shoots emerging. As you are aware, that the country experienced its hottest summer in 14 years, leading to robust demand for summer products.
Discretionary consumption was however impacted due to increasing food prices and muted consumer confidence. In this context, the company achieved commendable profitability driven by volume growth. Our consolidated revenue at INR 906 crore grew by 10% over the previous year. The domestic business saw an 8.7% growth in volume terms and a 10% growth in value, led by our summer portfolio. Navratna and Dermicool grew by 27%, while our healthcare range grew by 11%. 7 Oils in One grew by 9%, BoroPlus grew by 4%. Additionally, The Man Company and Brillare continue to perform well, growing by 23%. The pain management range faced headwinds, declining by 7% due to heatwaves. But sales have begun to pick up since June.
While the slowdown in discretionary consumptions continue to impact our hair grooming and Kesh King range, which declined by 5% and 15% respectively. We are implementing various strategic initiatives to revitalize these portfolios and restore their growth trajectory in the coming quarters. During the quarter, we launched the first prickly heat powder for women, Dermicool for Her and Dermicool soap, with superior cooling effects in the modern trade and e-commerce channel to leverage the brand equity of Dermicool. Additionally, we also introduced various digital-first products under Kesh King and ZanduCare portal. Organized channels continue to perform well, the modern trade growing by an impressive 25% and e-commerce surging by 29%, both contributing 11% to our domestic business. Our institutional business also grew strongly by 23%, and general trade also returned to positive territory.
International business grew by 11% in constant currency terms and by 10% in INR terms, led by MENA and SAARC regions. Despite facing currency depreciation in Bangladesh and macro issues impacting the CIS performance, we achieved double-digit growth led by key brands such as Navratna, Crème 21 , 7 Oils in one , and Kesh Skin. From the financial performance perspective, our gross margin at 67.7% grew by 230 basis points. EBITDA at INR 216 crores grew by 14%, despite a 21% increase in A&P spends, with EBITDA margins increasing by 90 basis points. While profit before tax at INR 178 crores surged by 19%, with margins expanding by 160 basis points, and profit after tax at INR 153 crores also grew by 11%.
We remain committed to our aspiration of delivering sustainable and profitable volume-led growth. We continue to focus on our strategy to improve our distribution reach, invest aggressively in our key brands, and drive market share growth across our portfolio. With the forecast of a normal monsoon and the government's continued focus on macroeconomic growth, we expect the improvement to further accelerate in the coming months. Thank you for your continued support and confidence in our company. We look forward to a promising year ahead. Thank you. Now we open the floor for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama. Please go ahead.
Yeah, congrats on a good set of numbers. My first question is on healthcare, and Zandu Care. So, a good 11% growth in healthcare overall, with the La Niña effect this time, which means generally a harsh winter. Would you be extra aggressive in terms of for the inventory build-up? In terms of Zandu Care, if you could tell us what is the right to win here? You have done well. It seems a good double-digit growth in Q1 in Zandu Care. Those 5 products which have been launched, for example, in the digital-first, what is the competition here? How is your pricing versus the other large players, and what is the right to win here? Because digitally, many companies are launching, but ultimately, how do you get a good market share here? Will it be more of pricing led only? If you could elaborate on the strategy.
Yeah. So Gul Raj is here. Gul Raj will take that question.
Yes. Thank you for, you know, the very pertinent questions you raised. I think, and thanks for, you know, your compliments on the growth. I think from a ZanduCare perspective, to answer the two, three questions you raised, you, as you are aware, the focus is on the online space, whether it is through ZanduCare as a D2C platform or through, you know, other, other e-com platforms such as Amazon, Flipkart, et cetera, and then the e-pharmacy chain. We are also launching many of these products in the modern trade space. So our pricing obviously compared to the regular products which are available in the GT space is at a premium, but it's more or less in line with some of our major competitors. It's not that we are overpriced compared to competition.
Secondly, what is our right to win? One is the Zandu branding itself. You know, in the Ayurvedic space, Zandu, would be among the top, you know, leading players in terms of the consumer perception, consumer equity, brand equity. And thirdly, the kind of product development capabilities we have from an R&D perspective would be unmatched. And the fact that we had two WHO GMP manufacturing units. WHO GMP certification is very difficult to obtain. We are probably the only player who has got two manufacturing units, in the country. So from a product quality perspective, from a product efficacy perspective, finally, we are in the healthcare space, so we have to deliver on the efficacy.
From all that perspective, whether it is the pricing, the marketing strategy, the product quality, the product efficacy, I think we have a right to win on each and every product which we are launching with it.
Which ones are more-
Sorry, just to add, we are the first mover advantage. See, not many companies have their own platform. We had launched just post-COVID, and we are seeing good traction from Zandu Care. Now, we have robust data, you know, in the last 2, 2.5 years since we have launched. So we are also, you know, reached out to lakhs and lakhs of consumers, you know? So, though it is in the initial phase, but, in terms of, advertising, in terms of, you know, spends on healthcare, is going to be significantly high compared to the CAC. So it will, you will see a double-digit growth, going forward in the healthcare.
Understood. My second question is on the category, which was the most challenging this time. So Kesh King, -15% YoY. If I see the largest market share in hair oils, they have also been struggling in value-added hair oils for many years now, and Kesh King is also in the premium. So where is the customer going? Is he just downtrading? What will be your sense of growth for the other key player? Because they have also been advertising a lot. And when I compare this with the 9% growth in the 7 Oils-in-One, I understand it will be on a smaller base. How do you explain in the 7 Oils-in-One 9% growth, and then in the more premium 15% decline?
So Abneesh, Kesh King has a pattern. In some quarters it comes to growth, in some quarters it declines, depending on the consumer promotions and trade promotions that we offer. Overall, you will not see such kind of a decline going forward. This quarter, hopefully, we will get to growth numbers. So, year-end, yes, I agree that it is in the range of about 3%-4% decline. For that, of course, we are setting up a strategy, you know, through BCG.
But, I'm not very concerned that, you know, that 15% decline would continue. For, surely it would not be the decline. Yes, overall, the market for hair oils, particularly the premium hair fall segment, hair oil market is on a decline, for quite some time now. So that we will have to see when the consumer bounces back. I'm not very sure, but rural, as the rural market is picking up, we are seeing some green shoots. Hopefully, it should come to positive trend.
One last follow-up, and that will be my last question. So when you say that, you have promotions are very quarter specific and that's how growth is, could you comment on, the competitive intensity also, and why, promotions are so, volatile? Is it a more push strategy which is working currently? And for Kesh King, will it be like the company average 50% from rural, 50% for urban or more, urban salient?
The Kesh King is more rural salient, Abneesh, and this has been the trend in the past also. Nothing that we have changed, you know. So depending on the consumer promotions, the market behaves like that. So in a year we do two promotions, and whenever we do promotions, the sales picks up.
And competition?
Competition intensity, honestly, has come down a bit in this segment. We have, particularly Indulekha and, Patanjali is our main competitor. There we are seeing, intensity coming down.
Okay. Okay, understood. That's all from my side. Thank you.
Thank you very much. The next question is from the line of Awais Bakshi from Sundaram Mutual. Please go ahead.
Yeah, hi, team. Am I audible?
Yes.
Yes, you are.
Sure. My only question is pertaining to the digital and new age brand portfolio. While we have seen, you know, a steady growth across this 20% this quarter, can you comment on what would be the size of these brands now? Also, alongside this, any comments on the profitability of these brands? And lastly, any guidance on margin contribution from these brands to our overall EBITDA? These three broad points, if you can shed some light on, would be helpful. Thanks.
Sorry, Manish, can you throw some light?
Yeah, obviously. I mean, overall, if you look at our portfolio, e-commerce and modern trade channels have done well over the last few years, and we have also launched some D2C brands. We have also done some strategic investments in D2C portfolio via Helios and Brillare, which have become our subsidiary last 1 year, 1.5 years period of time. So we both margins are lower on these categories because of being a very smaller size compared to the larger core portfolio. But we see good growth potential and improving margins. So when we did investments in Helios, it was an investment phase, but post that it has been, it has started, it broke even and started making profits.
And, others, like Brillare, is also into investment phase today because of being a smaller size. But going ahead, we expect margins to improve on these fronts.
What would be the size of these brands now?
Like, the brands which we have launched for our digital portfolio would be around INR 10 crore kind of size for us. And for
Okay.
The brand company and Brillare contributed to more than around 5%-6% kind of revenues for us last year.
Sure. And in terms of profitability, sir, I mean, they'll be inferior to our core portfolio, but still where are they in terms of EBITDA margins?
Very, very small margins. Most of them are into investment phase. As I said, Man Company, which is t he bulk of the revenues for this is breakeven. It is earning some profits, but others are into investment phase.
Perfect. Perfect, sir. Thank you. Thank you.
Overall, overall, everything put together, it is still negative.
Sure, sir, sure. Helpful. Thanks.
Thank you. The next question is from the line of Binay Shukla, PhillipCapital. Please go ahead.
Thank you for the opportunity. One question on demand side. So how was the July month with respect to demand environment side, specifically in the rural market? If you can quantify, how was the overall situation during the quarter? How specific was the demand?
July was quite good, Binay. So we will have to wait for another... Because monsoon is good in most parts of the country, so we are seeing a good demand cycle.
Okay. The second question is on Kesh King side. Although we are taking the initiative to drive the growth, such as we have launched our new products, focusing on non-hair oil portfolio and providing continuous media support, and that is reflected in your A&P cost. But what kind of sustainable growth trend should we expect for next two to three years in Kesh King, given the category headwinds?
As we are reworking on the strategy for K-Beauty, you know, and we have brought in BCG to develop a long-term strategy, we expect to get to the growth, at least 5%+ growth on K-Beauty.
Okay. And in the PPT, you mentioned that you are focusing on Maharashtra, Bihar, West Bengal. So why are we focusing on only these three states and not in other states?
No, these are the primary states. These are the big competitors for Kesh King, you know? So-
Okay.
We are increasing our focus in these markets.
Okay. So then, just data point I, I'm looking for, so how is your mix between when I'm comparing with hair oil versus non-hair oil portfolio in Kesh King?
Today, shampoo would be roughly one third of the overall portfolio.
Okay. Last question is then on the guidance side, because in your previous commentary, you did mention that you are aspired to growing double-digit revenue growth in 2025, led by 2%-3% price hike and balance maybe from the volume growth. So are we still maintaining the same guidance, or should we expect some better than what we have highlighted in the past commentary, given the improving macro, macro trend and seeing the healthy recovery in local market?
So we don't give guidance overall. We have to see how the monsoon or the winter performs. But yes, the momentum is good. The external factors like monsoon, the rural markets are shining, so we will have to wait and see how the markets, how the numbers, come out. But we are optimistic that, yes, we will deliver better than our last numbers, last year numbers.
Okay. If you allow, there is a one last question on gross margin side. So on the, will gross margin expansion will be led by the benign raw material prices, or we are witnessing any uptick in our commodity prices? And just follow up on the gross margin sides, should we also expect some GM improvement due to the change in product mix? Or just data point in terms of product mix, like, how is the... What percentage of revenue is coming from the premium portfolio? That's all from my side, sir. Thank you so much.
So we have seen expansion of gross margins this quarter, and for the full year as a whole also, we see some benefits on the gross margin front. And, it is coming from benign raw material prices and also judicious price hikes, whatever we have taken last year and this year. And, some amount of cost rationalization measures also, which is there, ongoing effort from our side.
What is your revenue coming from the premium portfolio?
Sorry, which portfolio?
Premium portfolio, sir.
Premium portfolio, as such, we don't define our portfolio within premium and non-premium segment as such. So if you look at our core portfolio, primarily it's mostly everything is core and for mass market. You can say that the strategic investments which we have done in The Man Company and Brillare are premium ones, so which is roughly 5.5%-6%, as I said earlier.
Okay, any aspiration to increase or improve our premiums from five to what percentage in next two to three years?
So our endeavor would be to focus on our core portfolio as well as the new ventures which we have got into and grow the larger ones. So it could all depend on the kind of growth trajectory we see for our core as well as the new areas. So whichever, if everything goes in line, we will be at a kind of a similar revenues will be coming from similar, in a similar fashion. But obviously the strategic investments are pretty small today, so going ahead, they have potential to deliver almost double-digit kind of numbers to our top line. So their proportion should increase.
Okay. So one clarification on volume growth, 8.7% volume growth is ex of inorganic business or it is, including TMC and Brillare ?
So there is no inorganic portion in our numbers now. So these strategic investments have become subsidiary for more than a year now, so everything is in base today.
If I exclude the item delivery volume growth, what will be the adjusted volume growth for the quarter?
Without the strategic investments also, our volume growth is over 7% kind of.
Okay. Thank you so much, sir.
For the core business, yeah.
Thank you.
Thank you very much. The next question is from the line of Harit Kapoor, Investec. Please go ahead.
Hi, good evening, this is Harit here. So, just a few questions. One is, you know, you mentioned, on, on the pricing side. So, you know, this quarter pricing seems a tad lower. I just wanted to know, do we expect incremental pricing actions in the balance part of the year or, you know, given the commodity environment, there's no real need, from that perspective?
So, Harit, yeah, this year, we will, we will not be very aggressive with our price increases.
Mm. Okay. Got it. Got it.
On, you know, the, you know, you mentioned in your release as well as in your opening comments, the expectations for growth to accelerate. This quarter has actually been, you know, quite a good quarter.
You know, 9% volume growth is close to 9% volume growth is a very healthy number. Mm-hmm. But there definitely has been the help of season. I'm just wondering, you know, you know, with season being, say, neutral on a year-over-year basis for the next two, three, four quarters, do you still expect that, you know, the overall demand environment as well as your actions could lead to similar to accelerating growth? Is that the way to think about it?
Sorry, that is, of course, our endeavor, and yes, this season we benefited from summer, no doubt. We could have done much better if we would have had enough supplies. So a lot will depend on multiple factors, but let us enjoy what we are having right now. Things are improving at the ground level. Rural markets are also shining. So hopefully we expect anywhere between 5%-6% volume, 1%-2% you know, value growth. So as I said, a lot depends on many external factors. Very, very difficult to really say, you know, what numbers we will achieve.
Sure, sure. Fair, fair point.
But a lot is happening on distribution, casing strategy, Fair & Handsome strategy. The brands which are not performing so well, you know, the company is having increased focus on core portfolio.
Great, great to hear. Great to hear.
Advertising budgets have increased significantly over the last two quarters. This quarter also increased by 21%, and going forward also we are going to be extremely aggressive, you know, in terms of spends, launches. There is a lot happening right now, honestly.
Mm-hmm. Great, great to hear. So great to hear. And, you know, just you saying, you know, let's enjoy the good things. I just was wondering, July has been a fairly, you know, from a season perspective, it seems like it would have aided pain management. You know, you know, you had a rough June, and, you know, I think July from a monsoon perspective has been strong. So, is, is that the, is that a right way to read it, that you should see a fairly, fairly quick turnaround with this one if, if, if, if, if the coming months are also okay?
Yeah, paid portfolio is doing well in July because it's a peak season for paid portfolio. But we have another two months to go for the quarter. So let's see what, how, how it turns out to be.
Okay. Great. Great. And one last, you know, question was, you know, you did mention on ground green shoots and things improving. I was wondering, you know, are you seeing this at an all India level, this improvement on ground, or there are certain markets, certain regions in rural that are doing better than others? Just your experience of how it's been, given your sales is so strong in rural.
Yeah. Manish, can you throw some light?
So overall, the uptick is everywhere, but I would specially call out, for our business at least, north is a little ahead. East, we are doing well. West, we are experiencing a lot of expansion of modern trade, and hence, you know, kind of, channel shifts happening with general trade, and south has been pretty steady, like always. So if I were to call somebody out, I think at least our gains have been more in north.
Got it. Got it. Okay, I'll come back to you more. Wish you all the best. Thank you.
Thank you. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead.
Thank you for the opportunity, sir. So my first question is with regards to the tax rate. If you look at the tax rate, this time around it's 15%. I think last quarter was also around 14% or... And I think we have a guidance of around 10% tax rate for the next two years. So how is there any modification in our tax rate going ahead?
No, I think, we have seen some higher tax rate in quarter one, but, I, we feel it should moderate down for the remaining part of the year. So for the full, full year, 10%-10.1% should be maintainable.
That would be the similar number for the next year as well, sir?
Yeah.
Okay. So the next question is with regards to The Man Company and Brillare. You know, while the sales are lower, but, you know, we have also seen the growth rates now coming to around 20, 25% or... So is this a seasonal phenomenon, where, you know, these brands continue to grow lesser in these quarters and probably we could see higher growth going ahead? Or any light that you can throw on the growth rates of these two brands particularly?
So, it was not very audible, Gaurav. What was The Man Company and Brillare?
The growth rates. Now, you know, given that the base is small, that they are growing 20-25% or... My question was whether we will be able to maintain these growth rates, or there is some element of seasonality even in these brands as well?
So there is no seasonality in The Man Company or Brillare. Brillare is growing faster than The Man Company because it is smaller. But put together, now they are almost in the tune of INR 225 crore. This year we expect to reach together to INR 75 crore, so which will be almost 8% of our revenues. Yeah, but we hope to grow at about 20%-25% in these two products.
Sir, just a clarification on this bit. You know, when you say that, it's now around 5%-6% of your sales, I'm assuming that this will be the consolidated sales?
Yeah, yeah. Total sales.
Okay. Okay. That's all. That's all for me. Thank you.
Thank you. Parties who wish to ask questions may please press star and one now. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead.
What percentage of revenue came from summer link portfolio in this quarter? And what was the growth in the summer portfolio overall? And what was the growth for the rest of the portfolio?
Yeah. Yeah. So summer portfolio this, this quarter, grew by almost 27%, which was primarily Navratna and, Dermicool. So, and, revenue for these portfolio would be have been roughly 50%. Half of the revenue came from summer portfolio.
So the rest of the portfolio would have likely not grown at all, or what would be the performance, haven't done the math but-
No, no, it did. I think, Mohanji mentioned in his opening remarks, and also we have shared the presentation there you will see healthcare range have grown by 11% in double digits. BoroPlus range have grown, but pain management suffered because of the heat waves during the first quarter. And obviously, Kesh King and Fair & Handsome male grooming had, had their own issues this quarter as well. Going ahead, we are taking actions to recover the lost ground. And the other, other businesses like the Man Company, Brillare, have grown strongly, international business have done well. So we have seen categories of businesses which have done well in this quarter, apart from summer, as well as some of the areas where we have been impacted.
But if I do the broad math, 50%-
So the 50% I talked was, was for the domestic business.
Okay.
It implies that, like, the rest of the business almost did not grow, because half the portfolio-
No, because Kesh King declined in double digits, Fair & Handsome declined, and also Pain Management declined. So overall, you are right that it was almost flat-ish growth for the rest of the portfolio, core portfolio.
that case in the coming quarters, as you don't have the benefit of season, what gives you confidence that you can drive double-digit growth rate in, or like even 7, like 5, 6% volume growth, 1, 2% value growth, which still implies high single digits? So as you don't have that benefit going forward, how do you expect close to double-digit growth to come?
So just wait and watch, Kunal. We are doing a lot of, you know, strategic initiatives. And as I said, there are green shoots in the rural markets, and July also has done well. So just wait and watch. We are doing a lot of activities. Yeah.
Understood.
So just to add on that.
Meeting on A&P.
Yeah. Only to add on that, the pain portfolio, which has suffered because of the heat waves in quarter one, we expect good recovery in pain portfolio. Going ahead, winter should be; we have a favorable base. This would help us. And as Mohanji said, a lot of initiatives are being taken on male grooming and Kesh King. This through which we should be able to arrest the downturn, and some growth should also happen on those fronts also.
Understood. Thank you. And second and last one is on Kesh King hair oil. What's the size now in terms of revenues? And, like, how has it done since the acquisition, what kind of rigor have you seen in terms of hair oil? I'm not talking about the shampoos and other extensions which you have done, but the Kesh King hair oil, how has it done?
So overall, overall, Kesh King portfolio is over INR 300 crore kind of a size, and when we acquired it, it was 200, 200 and 30-odd crore kind of a size.
But you did mention one-third is coming from shampoo.
Yeah.
So hair oil, since acquisition has not grown at all?
So shampoo was there earlier also, but with a lower share. So during that time also, some bit of shampoo was there. So hair oil, obviously, yes, for last couple of quarters, we are facing challenges. So it has grown for last couple of quarters, so it has taken off. But shampoo, we are pretty much excited and which we are focusing as a new brand itself only, and that is showing encouraging response. So overall portfolios still looks interesting to us. As Mohanji said, with we are taking strategic initiatives and look forward to at least mid-single digit kind of a growth going ahead.
Understood. That's all from my end. Thank you very much.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Harit Kapoor from Investec. Please go ahead.
Yeah, thanks for taking the question. I just had one follow-up. Rajeev, could you just help me understand the amortization schedule for this year and going forward?
Yeah, sure, Harit. This year, amortization would be roughly INR 92 odd crores, kind of. Going ahead, it would be INR 88 crores, INR 75 crores for next two years.
Got it. That was my question. Thank you. Thank you.
Thank you so much. The next question is from the line of Soham Samanta from Centrum Broking. Please go ahead.
Yeah. Hi, thank you so much for giving me the opportunity. So, just wanted to check one thing in MP, like this quarter, we have done almost 20.3%. So, what will be the expected range for this year? So normally, we have seen last six, seven years, we have been maintaining 17%-18%. But will it be grow more than that, like 20% range will be there in this year?
On advertisement you're talking about?
Yeah, yeah, A&P.
Yeah. So if you look at our advertisement pattern, it is slightly higher on in quarter one. So for the full year, we should be able to manage within that range, right? 50 basis points to 100 basis points can always increase depending on the need.
So in that case, we'll expect that our margin level it will be, around 26%-27%? It will be in that range? So if you look at our, numbers for this quarter also, we have gained on the gross margin front, and we expect some gains for the full year as well. So we should be, we should be able to, increase some bit of margins, EBITDA margins also for the full year, despite higher advertisements.
Got it. In the second part, in Navratna, like this quarter, we have done 27% growth. So do you expect, for full year, like the season is gone right now, but do you expect for a full year, can you expect a lower double-digit growth in this, particular year?
No, yeah, yeah, yeah. Sure.
Okay. Okay. Like, as you have mentioned that this, hair care and male grooming both are working under BCG and all. So like for hair care, as you have guided for 4%-5%, like similarly with growth, so do you expect the similar kind of growth you can get from male grooming range as well for the full year?
Yeah. Yeah, obviously, more than.
Yeah. So we should expect a higher growth coming from male grooming.
One, if the strategy is in place, it will take one more quarter for the strategy to be rolled out. Then we will have to wait for the results.
Okay. Okay. And so the last question from my side, like the Project Khoj, as we have already completed the project, and so what are the benefits now we are getting, if you can explain something about that?
I think you can take up this question offline. This is a long, drawn question. You can always talk to Rajesh and discuss it with Manish.
Yeah. Oh, thank you. Thank you so much. That's better.
Yes, sir. Thank you.
Thank you. The next question is from the line of Nilesh Shah from Envision Capital. Please go ahead.
Sir, I just want to delve a little bit into this growth aspiration, and a lot of things were discussed on the call about how rural is doing very well for you. Zandu and the pain management part doing very well in July, impacted by seasonality last quarter. And then you spoke about how The Man Company and Brillare is also doing. You know, the growth in the digital portfolio is also very strong. We've had weak winter sales last two years. Monsoon has been good. With all these factors in place, you still sound a little bit conservative, if I can say so, on the revenue aspirations for the financial year. What is it that you are looking for to fall in place to get more constructive?
And Nilesh, this is only through our experience in the past, you know, we can always sound very robust, but there are a lot of external factors, you know, which come into play. There are government initiatives. Monsoon has been good this month, but we don't know how the monsoons... In some parts of the country, the monsoons are extremely weak. In the eastern parts of the country, the monsoons are very, very weak. So we are a pan-India player, you know. At times, we have seen markets suddenly going up and down. So, it's not just that we sound optimistic and at the end of the year, we say, "Well, we could not deliver." That's not the way we look at things.
So, yes, there are some clear areas which is, you know, digital front on e-commerce, modern trade. Like, this month, Bangladesh has been a disaster in the international business. So, you know, there are some unforeseen circumstances which just keep on coming in. So how do you really guide on numbers?
Okay.
So, let us just wait as the things go by. If things improve, we will all come to know.
Got it, sir. This makes sense. Thank you very much.
Yeah.
Thank you very much. The next question is from the coordinator. Mr. Percy, please go ahead.
Hi, sir. Can you just give us your thoughts on how you think about inorganic growth in terms of what are the areas that you would want to look at? What kind of synergies would you sort of expect what you bring to the table? What is the rough size over three, four years that you would be looking at, and so on? I mean, the general thoughts on inorganic growth, please. Percy, we don't discuss on inorganic growths on a con call. No, sir, I'm not asking about any specific targets. The overall thought process, how open you are to it, and if at all, in which areas you would be looking at, and so on.
Of course, we are open for inorganic growth. You have seen, we have done Dermicool, we have done so many strategic investments in The Man Company, Brillare. There are a few more that we are looking for. So there is no doubt we keep on looking for inorganic opportunities. We have a strong balance sheet, you know, look for inorganic opportunities.
Understood. Understood.
This is part of our long-term strategy. Inorganic is part of our long-term strategy.
Correct. Correct. This would be largely in India, or would you look at international also, as far as inorganic is concerned?
The first choice is India, no doubt. But if we get some inorganic opportunities outside of India, but very specific markets, then we will look outside India.
How would you look at, I mean, which areas to sort of prefer? Is it that you would look at inorganic in order to give you an entry into certain categories which you are not there, or would you prefer to consolidate market share within current categories?
The inorganic is a broad strategy, Percy. Again, as I said, I can't discuss inorganic strategy on a con call, but we will discuss inorganic strategy.
Sure, understood. Understood. I just wanted to understand on the weak parts of the business, which is the male grooming and the Kesh King. You mentioned that you would sort of look at strengthening those aspects. Again, I know you cannot talk before some things actually happen, but is it more in the line of diversification of the product portfolio, or is it more in terms of rejigging and getting the core products growth up first?
It will be a mix, Percy. There would be a lot of new line extensions in both the portfolios, both in Kesh King and Fair & Handsome. The strategy, we are working on it. Of course, we are very unhappy with the numbers of Kesh King and Fair & Handsome. The brand teams are rigorously working on the long-term strategy for both the brands. As I said, this month, this quarter was one-off for Kesh King. We would see growth bouncing back in this quarter. Same for Fair & Handsome. You will not see these kind of declines in both the categories.
Understood. That's all from me. You can go ahead with the question queue, Deepika.
Thank you so much. The next question is from the line of Binay Shukla from Phillip Capital. Please go ahead.
Yeah, thanks for the follow-up question. One question on the organic segment. We have launched Zandu Dandruff in natural segment a couple of quarters back. So have you rolled out this product to GT channel, or is it still on the modern trade channel? And, if you comment on how the traction so far on the Zandu Dandruff side.
Gul Raj, yes, I'll answer that. So, yes, as you said, we launched it 2-3 months back. The physical rollout happened about 2 months back, and we have been giving marketing inputs and other trade marketing support. So we started to see, you know, the response, but we are still in a stage of, you know, testing the waters here between e-com and between modern trade. You know, as you know, this category has a certain usage timeline at home. So what is important is to see what the repeats are and how many people or what category people repurchase and what is the answer we get. So, it'll probably take us a few more months to know and understand what the real response is.
So at the moment, we plan to support the launch by way of inputs in the e-com and modern trade channel. We'll probably take some more time to decide on the further extension into the retail market. But the overall feedback seems to be good, whatever, you know, initial inputs we got from consumers and the trade. So we are still in the process of. We had launched it in a couple of states. We are in the process of rolling it out into other states in modern trade.
Understood, sir. So how is the toothpaste category growth during the quarter? If you can give any, a broad cut range in percentage terms?
We don't have specific, we don't subscribe to Nielsen, et cetera, but my sensing is it could be in the region of around 10% for the category growth.
Overall, not the natural category you're talking about?
Yeah, that's right. Overall.
Last question is on the Dermicool. Are we planning to leverage our Dermicool brand via entering into the adjacent category, like we are doing for Kesh King?
We launched the Dermicool soap-
Really?
-this quarter.
Okay. Understood, sir. Thank you so much.
Thank you.
Thank you very much. To ask a question, please press star and one now. Ladies and gentlemen, as there are no further questions from the participant, I now hand the conference over to the management for closing comments.
Thank you everyone for joining us for today, today's call on quarter one results of Emami. Thank you, IIFL, for arranging this call. Have a good day. Thank you.
Thank you.
Thank you.
On behalf of IIFL Securities Limited, this concludes this conference. Thank you for joining us, and you may now disconnect your line.