Q1 21/22

Aug 5, 2021

Quarterly report

Ladies and gentlemen, good day and welcome to the Bajaj Consumer Care Q1 FY 'twenty two Earnings Conference Call hosted by ICICI Securities. 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Aniket Sveti from ICICI Securities. Thank you, and over to you, sir. Thanks, Garuna. Hi, good morning, everyone. Thank you for joining. It is our absolute pleasure at ISEC to host the management team of Fajaj Consumer for Q1 FY 2022 results call. The company is represented by Mr. Jaydeep Nandy, Managing Director Mr. Dilip Kumar Malu, Chief Financial Officer and Mr. Kushal Maheshwari, Head Treasury and Investor Relations. Before I hand over to the management for their opening remarks, Just wanted to highlight our view on the business very quickly. So we have been long standing believers of the Bajaj Consumer validation story And like its brand building and distribution expansion efforts, along with the intent to have a comprehensive portfolio of hair oils in the medium term. With that, I hand over to the management. Thank you, and over to you, sir. Thanks, Aniket, for Firstly, hosting this call and good morning, everyone. My name is Jadeep Nangdi, as mentioned, and I've been joined by Some of my colleagues from the management committee over and above Mr. D. K. Malu, the CFO and Kushal Manishwari, our Head of Treasury in IHIA. I hope in this period all of you are keeping safe. That's very important at this stage. And as I start, let me take you through the performance of the company during the Q1 before I open the house for questions. As the quarter started, we saw disruption due to the 2nd wave of COVID-nineteen, which led to the lockdown in the month of April May as well. The impact was very severe for us in April where our things really dipped. But by May, the normalcy in operations had resumed. Our business also came back. June saw very good recovery for us when the lockdown restrictions were eased. Sales actually rebounded in the month of June, and that's our highest ever monthly sale for us for a single month in the month of June. And fortunately for us, July also seems to be continuing the same momentum. The company reported a sales turnover of INR211.99 crores for the quarter with a growth of 10.7% for the same quarter of previous year. The total value growth for the company for the quarter excluding sanitizers was 20.4%. The contribution of sanitizers have gone down from 9% in Q1 of last year to about a percentage in Q1 'twenty one. The total volume growth for the company was 16.2% and excluding sanitizers was 24.3%. The EBITDA for the quarter was 53.6 7% which is a decline of 7.8% this year. The EBITDA to sales ratio was at 25.3% for this quarter. The gross margins were at 58.66%, a decline of 4.9% over the corresponding quarter of previous year. The drop in gross margin was primarily due to sharp price increases in LLP and RMO over the quarter. The commodity prices Still remain inflationary during the quarter with strong uptrend in global edible oil prices, which is having an impact on the RMO prices. The MRP price increase of about 2.5% that we took helped to partially offset the impact of raw material price and packing material inflation. We'll keep a close watch on the commodity prices in the coming quarters and take corrective actions, if and as necessary. PAS for the company was at INR48.87 crores against INR54.19 crores for Q1 of last year. There has been a recovery in hair oils category as per Nucynt's data in the months of May June with a 25% via value growth in Q1 and June mat growth of 5.4%. The rural markets continue their strong growth momentum reflected in June mat growth 10% while urban markets have also recovered sequentially posting a 22.1% growth over last year, though on a low pace. For VCQ, both urban and rural markets have shown healthy growth reflecting in share gains in both. Rural markets continue to outperformed our markets for the 4th successive quarter for the company. As per Nielsen data, there has been a sequential increase in total market share Buy value for BCCL to about 10.8 percent for quarter 1 of FY 2022, 120 basis point increase over the corresponding period last year And our all time high, mat, June market share of 10.7% on the total overall sales. There has been also a 124 basis point market share increase in volume terms as well in Q1. The van operations for the company was Very badly affected in April as well as a bit in May due to this extensive lockdown in rural markets as well as in In fact as well, in June, they have recovered to the pre lockdown levels. In July, we are now To actually absolutely add to just the quarter four levels that we were at. While we continue to increase our bank footprint and optimize our operations, We expect our non ADHO portfolio to help improve efficiencies and to expect our ADHO remain where it is, we expect the non ADHO portfolio A little more of the share in the banknotes. There has been good growth registered across all zones in the country, But Central Zone, which brought the brunt of the lockdown, so all the states in Central Rajasthan, Madhya Pradesh and Shabir Sur, And this caused a delay in their recovery and Central actually was the only zone which had a negative growth in the entire quarter against last year. And as Central is a large component of our business comparatively, that also impacted our overall business. ADHO, our flagship brand, continues to do well recording a sales growth of 20% in the quarter and increasing its market share in the total KRL category of about 100 basis points. AHO on the other hand doubled its turnover in the quarter, albeit on a low pace. There has been a preference for large packs in general trade, which has helped drive While wholesale business has been a challenge as most of the wholesale markets were In the Q1, our focused retail initiative, which we had talked about and wanted to take over as Our initiative for the next Aza key initiative for the next 2, 3 quarters has been doing well and this has helped our retail grow by over 50% in the quarter. This will continue to remain a key initiative for the company for the remaining part of the year. Despite most of the modern trade stores being partially or Fully closed during the months of April May, the channel has delivered high teen growth for the company. Most of the stores had resumed normal operations in the month of June, And outlook for modern trade at this moment looks optimistic. We continue to increase our visibility in modern retail outlets with the quarter, our products are now available with more online retailers, while there has been increase in assortments with existing retailers. E commerce will continue to remain a thrust team with a senior resource joining the team to spearhead the business, while we prepare for our next phase of digital first brand launches in the coming quarter, while strengthening our presence of our existing range with the retailers. International business has shown good growth for this quarter. The travel restrictions continue to hamper the growth in the GCC markets. Despite the strict lockdown in Nepal and Bangladesh, these markets have managed to deliver healthy double digit growth. The contribution from exports to other parts of the world have also gone up. During the quarter, we continued to invest in our flagship ADHO brand across all mediums of TV, social media and print media. Taking a break in May, We came back to normal levels in June as the market conditions normalized. The new commercial on TV has been doing well on message communication and other reach out to younger consumers. Bajaj Amla Aloe Vera hair oil relaunched in the last quarter continues to gain market share in key Amla markets Despite lockdowns impacting doodle brand sales, the new PV campaign for rural market rural markets is already on air and has Providing additional marketing support for accelerating trials of beta, yamla, aloe vera hair oils with advertisements from local daily. As a part of our initiative to expand our portfolio, we have just launched Bajaj Pure Coconut Oil in the last week of July. We believe there is sufficient room for all branded coconut oils to grow in this category and gain share from unorganized players. Our strategy in pure coconut oil is to offer a reasonably priced premium product with 100% pure coconut of the highest grade. As a part of the initiative to reduce the overall carbon footprint in the value chain, we have reduced the consumption of glass by 16% by optimization Initiatives to explore the usage of recycled PCR as well as recyclable laminates. As part of extended producer responsibility, we will be collecting and 100% of our consumption of plastic materials, in Q1, we have already collected we have started collected and disposed of 13% of the fee. One of our primary objectives is also to build an efficient and a capable team in BCCL. A variety of initiatives have been embarked on the company towards this objective. We have also been inducting crucial talents to create a strong management team for the future. The company has received accreditation from GTW with strong numbers, Upsides in areas of management credibility, business acumen and training and development. The company has also launched Bajaj Care program To assist our employees, we launched it during the 2nd phase of the COVID-nineteen pandemic, both for our employees and families and has had Good feedback from the employees on that. Now with the market conditions normalizing and having had a good start for Q2, we are optimistic performance for the rest of the year with the planned brand launches that we have for the next 2 to 3 quarters. So with that, I end my opening remarks and open the session for questions. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. While asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. The first question is from the line of Vishal from Philip Capital. Please go ahead. Yes. Hi, sir. Just two questions. Sir, what is the combined price hike that you have taken during 4Q 'twenty one and 1Q 'twenty two? So the total price hike is close to about 3%, taking close to about 0.5% Close to 1% in last quarter and about a little more than 2% this quarter. So total comes to about 3%. Okay. And sir, you have taken a lot of cost saving initiatives, I think that has been mentioned in the PPT. So you can just highlight that what kind of benefit that we're In the coming years from those initiatives? Roughly, we are looking at so typically, we are looking at about 20 odd initiatives that we have taken as far as Supply chain is concerned, so across both in terms of raw materials, in terms of logistics, in terms of looking at alternate raw materials, etcetera. And we are looking at roughly about INR 5 crores to INR 6 crores of cost state pure cost benefit coming out of that. So not a large number to start with, This is the direction we want to take going forward in the future because this we want to make an integral part of our entire efficiency Great. And then last question is on that. You have made a lot of senior management hires. I think new head of e commerce has come as well as head for international and modern day has come. So any more areas left or more of the heading is done now? So e commerce, we did not have anybody who specifically for e commerce. As you are aware, we are looking at e commerce. Like everybody else, we are looking at e commerce in a I mean, we are betting big on e commerce. So the brand launch in e commerce will happen in this quarter by the end of this quarter. So we wanted to be geared up for that. We have already Our back end is already geared up in terms of digital marketing, etcetera, in terms of sourcing efficiencies. All that work had already happened in the last two quarters or so. Now we have had 2 hires, which is the Head of International Modern Trade and E Commerce, who is a senior resource who has come from a very large organization and a specific person who will head e commerce under him, who's specifically only into e So that as well as some other team members we have already acquired. So this is what we are now going to dial up. And there will be furthermore a little more hiring Last question from my side on coconut hair oil. I think in past, have you launched or not? I have whether you launched a coconut hair oil or not in past. In case you launch, What how differentiated this kind of proportion is going to be versus in the past? I think what we'll we have had launches in the past. And in fact, There the issues were that offtakes for the product somewhere could not take place and basically we had to take back a lot of material at that Which has happened for some of the other products also that we have had in the past. Now how this is different, etcetera, will be a difficult question to answer. All I can See is that at this stage, this launch has been planned for quite some time. We wanted to look at specific markets. The objective of this launch are twofold. One is, obviously, we this is a large market and we do not want to completely remain out of it. We understand there'll be So we are also playing the game exactly looking at how being conscious of what the gross margins are and be clear as to what our own objectives Our objective is there are 2 objectives, especially if you look at these 2 markets of West and South. If you look at West, we already have a limited distribution network, not as Strongest than North, but we do have some distribution network and we feel without learning from what we got from our van initiatives happening even in North, While we were pushing Amla as a part of the assortment which was going in, because ADHO gained as a result of that. We feel that in some of these Western markets where Just to Amla itself, we will not be able to add on to ADHO. We think that Coconut can help us generate a little better In the South, it is clearly a distribution game. In fact, if with the planned launches that we have For the general trade maybe coming up somewhere around Q4 and then beyond or maybe end of Q3, Q4 and beyond. I mean the kind of Launches that we are planning, we would like to have a distribution network as far as South is concerned. Today, we have nothing. So this will help us have a distribution network to start with And not only ADHO itself which we'll try and push to, but there'll be also a set of launches we would like to use that channel. So West and South, 2 different strategies as well as Coconut is concerned at this stage. Moving forward, as we see Coconut happening, we will come back to you. Right. Thank you, sir, and all the best for the future. Thank you. Thank you. The next question is from the line of Aditya Balpani from Bryanston. Please go ahead. Yes. Hi, sir. Thank you for the opportunity. So my question is related to Coconut launch only. So sir, historically, you have always talked about launching a Hyalur variant Our product which can varying some value addition can be made or which can be differentiated with the existing competitors' product. So what really changed? So I just wanted to understand the rationale behind getting into a me too high roll category. And secondly, what will be the strategy So, yes, good question. So there are obviously there are 2 ways to look at products. One is obviously, you look at a differentiated product where even if it's a value for even if it's a me too, you look at a me too category, you look at a different Product and see where you can have strategic advantages as well as the product is concerned. Now there is obviously when you are looking at a very, very large, Large product category, well established product category where you have had not only me tools coming in from 1 company, this is more a generic category. This It's not a branded category. If you're talking of Bajaj, Yam and Crops and somebody were to copy it, that's actually a medium because there's no existing category as well. If you're talking of an Amla, if you're talking of a coconut, these are traditional existing categories. So while yes, I mean, obviously, with an established pair, it will be seen as if it's me too brand, but it's basically you're entering a category which hitherto you were not at. So this is one part. 2nd part is obviously which I answered. The biggest challenge you will see as far as this category is concerned is the gross margins and being a large player in that category, you will have to be a little smart in terms of Manuvari, in our case, very clearly, we see potential for us. As I said, in the South in terms of Having a distribution presence, which we are not able to have a foothold today, we require a foothold because not only for Coconut, but also for all the Brand launches that we would want to have in South. Today, we do not have any operations in South of any realistic estimate. This will Allow us that entry into the South as well as I said in some of the other key markets and our coconut story is not completely over. This is more a Starting launch, we will also want to see how it works and then we have some more plans as Coconut is concerned, maybe in the next 3, 4 months, it will slowly get done. Okay. And the second question is with respect to market share. Now in this quarter, in terms of value growth, we have underperformed both industry as well as the key players like And despite of that, if you if we see slide number 6, so the quarter 3 quarter 4 shows all India market share of 11% and 11 1%. But the graph above shows a little different numbers. So I just wanted to understand, so have we lost the market share or have we gained the market share? So what you saw is quarter numbers and these are basically the math numbers that the Graph above is the math number, right? So it's a moving average for 12 months as the market and the quarter the below graph that you see is the specific quarter. Now as you are aware, Amundrof's typically peaks during quarter 3, quarter 4, the winter months. I mean, that's a known data Great. So you will always see Q3, Q4 market shares going up and then Q1 again dropped, Q2 being the lowest and again Q3, Q4 going up. So the bottom graph is not really Can we tell you to the top graph? The top graph is a 12 month continuous MAC market share, because that's how You look at the market share. Now as you said, our performance, our apparent performance in terms Underperformance is I completely take that. But I think you'll have to look at it a little more in a nuanced manner. One is Obviously, a 20% growth in her oils is lower than that you see in the other company. But you'll have to see that in terms of the primary versus secondary, The way our secondaries have happened and we are seeing the result of that in June, in July, etcetera, because we had gone down in the primary, Specifically in the markets, just to give an example, let's say, Central, which is a large contribution, which we have the one of the largest contributions from Central Zone actually went negative. Even though we had 20% growth in hair oil, Central Zone was negative. I mean, it was a, hey, Madam, Deep, single digit negative as far as And given that our impact of Central Zone is high, it had an impact on the market. Now this is getting stabilized. I mean, June has been very good. July has been even better. April, May was completely cash out. And this is known, right, Chhattisgarh, Madhya Pradesh, I guess, and all that. UP, the wholesale markets of UP, that is the second impact that we have. Also wholesale markets, again, that is the other deep negative we have. While retail has had a percentage growth, wholesale for us has been negative. And as you again are aware, wholesale for us has a larger contribution than Most of the other companies. And we have had a deep negative in April May, which is getting started into getting normalized in June and again in July. So really speaking, I am not very concerned about those numbers of getting negative because in terms of where we wanted to grow, whether be it in retail, whether be it in the So those markets have been doing pretty well. So this temporary growth I see by quarter 2 will all get neutralized and So not really concerned. So central wholesale markets, I mean, clearly are the 2 big temporary Q1 drops that I see. Yes. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Abhneesh from EDWISE. Please go ahead. Yes, thanks. My first question is on D2C and the digital stuff. I know your company size is much smaller than Many of your peers who are investing in the DQC companies in the startups taking up stake. But What would be your thought process? You do have a lot of cash in the book. So any thought process on that or you want to do it Through the own organic group? So now it's actually Anhuvan's question in that way because these are multiple layered questions. So let's 1st, I'll take this cash in books first. Now cash in books is obviously that is there, but that needs to be utilized. I mean, whether there were cash So whether we borrow and leverage ourselves, the business parameters will not really change. I mean, you will not take a decision based on cash on the balance sheet for taking a business call. So whether we go for a as you asked, whether we'll go for a ready made M and A for a smaller e commerce Brand, whether we develop it ourselves, etcetera, we'll have to also look for opportunities. Yes, we are we will keep scouting for opportunities in the e com space if such But we'll on the other hand, we'll also look at what we want to do ourselves. As far as D2C is concerned, before I answer So let me take you through the journey of our own e commerce asset. So e commerce as a company, you would have seen that we Started late, but then as I keep saying e commerce is a more of a democratic world, so you can quickly catch up and ramp up. And that is exactly what we are trying to do. Our results are Quite better from 0.5 percent now. We are close to about 3.5%, 4% of our turnover, still lower than some of our competitors. But I think the direction seems to be correct and now we want to really place a puddle on that. So what we are planning to do at this stage is launch our own brand And it will be our own digital first brand with a plethora of products which are coming in. So that is something that we'll go on. And we'll also scout for, as you asked, Whether we will scout in the market for any opportunity there, yes, that is a journey that we are going to. As far as D2C is concerned, that is something I think is a little more evolved. And while we have been already discussing that, we have been having our internal discussions on that. I think we would first want to have our portfolio ready because the moment you get into B2C, As a consumer, I will be looking at what kind of assortment and what kind of portfolio you're having to offer. So unless you have a portfolio really seeking D2C will not So B2C is something it's not a question of if, it's only a question of when. So it will happen, but it will be a few quarters away. So that's helpful. My second question is on the broader leadership level. So you had joined the company around 18 months back from a Extremely large, formidable company like Hastings. So when you are joining now, if you Fee versus initial expectation, how has been the journey and where still there is room to improve? And in terms of the 2nd line leadership or the leadership at the top, are there more hirings which will be required? So see, as far as the second rung is considered, if you look at individual level of like my direct You will see them. They are absolutely top notch resources and comparable to any other company. I mean, today, at least I'm proud that We have a management committee which can actually sit shoulder to shoulder with any of the best in class. And that's We had aim to do, I mean, 18 months later, at least, we have that across all functions, whether it be in sales, marketing, I mean, any of that. Now what we are moving towards is N-two, basically their direct reporting, because 2 things that we want to address, which is basically not only the strategic thinking at the company level, but also operational excellence. While That is being dialed up through system processes, etcetera. We also require strengthening people. So that is something that we are focusing and maybe in the 5, 6 months that will happen. So I think as far as manpower is concerned, I think good progress and the team now They started working towards in terms of what they want to do strategically and so on. That is more or less in place. Now what we are now also started doing in the earlier stages was Processes, governance, etcetera, a lot of good work has happened in that. But I think that's a longer journey. So whether we're talking of a manufacturing footprint, supply chain footprint, IT footprint, etcetera, That's more of a journey where good start has happened, but I still think we are still 2 years away from the final end result that we would want to And I would also not want to fast track it too much because we would rather want to keep investing slowly and start building strength rather than want to jump into something absolutely 5 star overnight. So, slow and steady is how we would want to go there. But yes, all of them seems to be at least in terms of our whatever benchmarks we have picked, they are things to be on Sure. That's very helpful. Last question, a lot of questions on coconut has happened, but I'll be very specific here. So one is, does sourcing advantage economies of scale matter here because the number one player So it is almost 10% of the coconut in the country. So does that matter? 2nd, your packaging and color is exactly similar to the market leader. So does it make sense to do that? And third is in terms of pricing, are you differentiating or is it just that you just want to be there on the shelf, it helps the distribution, Will there be marketing support for this from a medium, long term? Okay. The first is the easiest question. So obviously, it I mean, I don't think even I need to answer that question. Does sourcing and economies of scale help? I mean, being a large player, being For such a long time, invested in this with the kind of backward integration, you can't even dream of questioning that. So obviously, it does help. But as I keep saying that it's such a large market, there is always space for some of the players also. And we have to give credence to Bajaj as a brand and It's strength and that is what we want to ride on. I mean, a lot of questions are also is the Me Too going to erode the Bajaj brand or not? Really speaking, no, No, because finally at the end of it, Bajaj, Amman drops on its own equity stand because Bajaj itself is a much more of a conglomerate bank because of whatever the family and so on and so forth. So that and hair oils is something that people clearly relate to. And our initial responses from the retail, This thing is also the same. Even a little bit of consumer study that we have done overall clearly says that, yes, we have a right to also clean this market. With the right to win or not, maybe too much of a statement to make at the state, right to play definitely. But as I said, we also have a Strategic intent for launching the coconut. This is also to not only establish the brand, but also get some headway into some of the markets Either we are underrepresented or not represented at all or maybe sub optimally represented because with the larger portfolio that I have in mind, we require vehicles And we think that Coconut will help us as a vehicle. So as far as pricing, etcetera, are we differentiated? Yes, we are differentiated. In terms of consumers, we are offering a price which is obviously more attractive for the consumer to for a first trial, etcetera. So this product is given as that. In terms of whether the brand looks deceptively similar or not, if you were to look at the actual packaging, there are a lot of differences and A lot of differences. So really speaking, I don't think there is too much of comparatives between the two brands as far as physical look, feel, etcetera is concerned. Yes. The only thing that you can talk of is the blue color. Yes, obviously, now if you look at all the coconuts which are there Except for the eastern part of the world, all the rest of Pan India, all of them are in blue color because that's how the leader is. If you look at, let's say, Amand oil, all of them are in that golden yellow, which is the typical golden yellow. I mean, you can't make Amand oil in any color if you wish. But then, Amit, oil is the golden color in a transparent bottle. So I think leader does have an impact in terms of influencing what happens. So that is how it does tend to. So I will agree to that point, yes. Are we in the blue color? Yes, we are in the blue color, but so is everybody else. That's very helpful. That's all from my side. Thank you. Thank you. The next question is from the line of Prakash Kapadia from Anewit Portfolio Managers. Please go ahead. Thanks. I had two questions. You mentioned the rural is better than urban in terms of growth. Is it Just the COVID impact being lower in rural in the second wave as compared to urban, is that the only reason or Anything else you can attribute to? So this year actually, rural was also very badly impacted. It is not that Rural was not impacted. Last year, for example, urban was absolutely impacted. Rural was not impacted at all. So last year, we flew in Rural. And last year, actually, if you look at our urban rural balance, it actually the imbalance that we had positive towards urban actually got neutralized. This year you see our rulers has gone ahead of urban. So now we are looking at rural having a higher share than Urban as well as the markets are concerned. So I think what has happened is last year, which we did with this entire band drive and with the Entire increase in penetration in terms of distribution, I think that helps. So in spite of muted van sales that happened in the months of April May, where we will Also suffered. Moment we came back in June and we are seeing that also happen in July, as we came back, Dural really bounced back. And that is what gives me a lot of confidence and comfort Saying that as the market stabilizes, we can come back and basically reap back our gains that we have Created in the last year. So ruble is actually that is the reason. Ruble impact was as bad, but we have been able to survive ruble much better. Okay. And if I look at the gross margins, they are almost at a 7 to 8 year low. Obviously, these are unprecedented times in terms of inflation and input costs. So in the near term, Jaindi, what will be the focus? Will it be Driving growth at slightly lower margins than what we've been doing over the last 2, 3 years? Or would you want a balance of Margin also bouncing back and volume being lower. So this is more from a midterm perspective because these costs could remain high in the near term also. I think that's a very good question. In fact, I think there we will not bear from our stated objective, which While one side, we are driving 2 things. 1 is assortment of portfolio because we want to actually Ensure that Amundrox is also supported by some few other brands. We will continue to invest heavily on Amundrox. I mean, that's our only cash power at this stage. So Obviously, there's it's a no brainer that Amintrox will always take our lion's share of everything. But we will also like to give it some more support By the side, so Amla is one of the products, Coconut is more a strategic launch, there will be some more products which will come in. So that effort will always continue. On the other side, because some of these will be gross margin burners or EBITDA burners, we'll also Try and ensure that we put a guardrail on the total EBITDA that we make. So in terms of a long term or at least in the midterm, the 2, 3 years period, We would want to ensure that the EBITDA remains as an absolute positive. Even as a percentage point, 2 points drop in, I'll really not be worried. I'll ensure I'll try and ensure that the EBITDA as Number keeps growing because if I am in the process while maintaining this EBITDA, if I am able to establish some of these bonds, I think then we are good to go for the next few years. Understood. That is helpful and very clear. Thank you. All the best. Yes. Thank you. Thank you. The next question is from the line of Patanjali from Mirabilis. Please go ahead. Hamish, sir, my first question is what is our margin for ADHO on a year on year basis? And if my understanding is right, our rough KVHO as a percentage of our revenue is around 91%, 92%. Is that right? That is correct. So as a percentage, see, I would not want to get into the exact percentage of ADHO. I mean, as you can Understand, with a 90% contribution, I mean, obviously, ADHOs percentage contribution is higher than the overall contribution The company Amla, coconut or coconut anyway is not there in Q1, but these products will not really have a Higher or lower gross margin than ADHO, but more importantly, at this stage, their contribution is much lower, does not really impact The overall contribution of the company. So you can take roughly the contribution of the company, add a few percentage points and that will be the gross margin So, it's 80%. You do the math 90%, so you can get it. Okay, sir. And with respect to the newer category launches, You had mentioned that pharma store presence is something we were looking at increasing. Has it showed any good benefit? Pharma sorry, can you comment sorry, I missed that question. Pharma what? Like product placements at pharmacies That kind of a strategy. Okay. So pharmacy is not a see, I mean, last year, we did experiment some 2 experiments on Pharma as well as institutions, but those are not one of our growth drivers. Those are more tactical operative things that we'll keep trying once and all One thing for all. The 2 drivers as far as the new products are concerned other than hair oils where we would want to complete our portfolio, I mean not only with coconut few more launches in hair oils. The 2 other large areas that we are focusing on is this entire e commerce digital first launch, which will take it on a completely separate track and basically the general trade launches, which is mainly not mainly, I would say Some part of it is the Bajaj drop extensions into hair care, personal care formats and some of them will be in the Relevant hair oils, etcetera. I mean, we'll see where we fit into the hair oils. So these are the 2 main lines that we'll take, but this will mainly go through the e commerce, will We go through e commerce and maybe the some of them may come through the Modern Trade format stores and the General Trade will be through General Trade and Modern Trade. These are the main two approaches that we'll take. The pharma, etcetera, we'll see as it goes through. Not really big revenue generator plan for the next Yes, sir. Sir, and directionally, can we tell that the worst is behind us with respect to margins? Because this quarter, I think it's like One of the relatively like a lower performing quarter. So can we expect that to improve in July, in the next quarter? So that's an interesting question. If you had asked me this question a year back, a month back, the answer would have been an unequal yes. But if you see today, And fortunately, we may not be the only ones impacted because of that. While LLP prices, the crude prices have been going down, we are getting bougain, but The exchange on the other side has been nullifying the impact. So LLP, you do not think immediately you will see a benefit. Maybe Q3 years, Q4 Q2 immediately we don't see huge benefits coming out to you guys. Some softening, but not really major softening happening. As far as RMO is concerned, on the other side, we see RMO prices have been on sale at a rocket high actually because of the Demand situation as well as edibles are concerned, which is in shortage, RMO prices have remained high and we don't see that softening in the current quarter. So people who have products with, let's say, mustard, etcetera, they will have a little more impact. But Yes. Whatever the impact has of RMO is there, we'll have an impact. And we will monitor the market. You'll see 2 things. 1 is in terms of consumer behavior, Whether we are able to take price increases further or not and obviously we'll monitor the competitive landscape. We see that others are going that path, we'll also follow suit. Thank you, sir. That's it. Thank you. The next question is from the line of Shireesh Badeshi from Centrum Capital, please go ahead. Yes. Hi, Jadeep, Balu sir. Thanks for the opportunity. I have three questions. The first question is that, if I understand correctly and what we know for sure, when I add Rajasthan and NP. These are roughly about 30%, 35% of our contribution. And if I add UP, it is a larger contribution. Now the question is specific. You said May April was a factor in this market And June has started recovery. Also, it was there was an impact of VanFin's operation. Could you talk something about how this market has performed In the second half of July, I mean, is it back to normal, ahead of normal or still there are some more room? And Just follow-up on that, how many VANs we have deployed in these markets? Okay. So, yes, that's an important So you're right. I mean these markets actually is about 2 5th of our business and that got impacted in April May very badly. In fact, April was actually a disaster for us. May recovered pretty well. May was higher than April 1st. In spite of May being More COVID impacted, our business in May was better. June, as I said, was the best month we have ever had. That trend continues in July. So all the pent up that got created where secondaries were far higher in April May in these markets, Which got little neutralized in June, not completely. By July, it had already got neutralized. And we see growth in both As well as UP being much, much higher than the rest of the funds. But that's not surprising to us because we knew that, that is a matter of time The secondary will catch up the primary will catch up with secondary. While having said that, I would still say That the wholesale market, some of the mandis have not completely recovered as yet. So that is something that we also see as a So while our rural has been doing well, our retail has been doing well, wholesale, some of the markets are still not completely bad. So our growth rates are good, but if wholesales will happen, we will be actually flying. So that's still not happening completely. So how many vans we are flying out of whatever number we have published last time, 7 and a lot of vans? Yes, so we are back to the Q4 numbers. And now with some more assortment coming in, we are looking at some of the zones where we would Coming in, we are looking at some of the zones where we would want to actually go beyond what we were doing in Q4. So one of the key things that has happened, one of the great things I see that has happened even during the April, May June period is the throughput percent fortunately for us has gone down. So a lot of Cost benefits that you see, some of the cost of work that happened as far as even the ASP costs are concerned in the band cost, which both sits in the ASP cost, The throughput of the Vans have been managed very well by the team. Operationally team has done a great job, and we have had better throughput in the Quarter of quarter 1 than that we had in Q4. Obviously, the RAN numbers had gone down. So by June, we were nearly close to what we were doing in Q4. July, we are equal and August, we are looking at exceeding that. Okay. Wonderful. The second question again on the coconut hair oil. You did mention that you have right to participate. Could you just tell me which market we have launched this product and in a medium to short term, what is it you are Are you benchmarking that distribution to a certain level? Or you are expecting some contribution as a benchmark to overall Something some more quantitative data points. So I'll only be able to share with you the markets that we have launched in. So we have launched in the West and the South, as I told you, with 2 clear objectives that we have. We have also launched in a particular one state in East, which is So at this stage, we are in Jharkhand is where we have launched this product because it's a group opener. So that's where we think We have rights to participate as I said and the objectives I just told you. In terms of numbers, I think it's a little too early to P. Vijay Kumar:] So at this point, I'll refrain. Maybe by another 3 months when we again talk, we'll have some numbers to share. Okay. Just one follow-up on the coconut again. You mentioned that Mac number says that it is INR 4,800 crores Category, could you please help me how much is the South contribution being this RMB4800? Exactly. 2,100. So roughly about a little less than half 45. That's South? That's South, yes. And West? So if you look at I'll tell you overall the top markets, if you do look at South as market. The number 2 market will be Maharashtra and the 3rd market will be West Bengal. The 3 put together will be about 70%. I can tell you about it. Okay, wonderful. My next question is on the international foray. I mean, you did do about 3 odd percent contribution in this quarter. And on medium to long term, like 4 to 5 quarter, how are you seeing your international strategy? And what is it that we can expect In terms of participation in the markets or what are the products which you are planning to get into? So once again, Suresh, if you recall, we had discussed that even, let's say, 4 quarters back or 3 quarters back That e commerce and international will remain 2 of our growth drivers. I mean, GT, new products, etcetera, will always be there. But both of this Clearly something where we think we have rights to win, and I think we are also building capability to win. So because only rights to win and knowledge to win will not help. So capability and I think in my mind, we are in the right direction as far as that is concerned. Anuj Joined us to head this international business, is already working on the strategy. I am also with a little bit of In international, I'm also lending my bit on that and I think we want to so in medium to short term, you will not see anything, but in medium term, which is maybe 4 quarters from now, 5 quarters now, you'll see our in international because we want to go a little this thing. We know the pitfalls that are there, What happens in Middle East? What kind of money is possible or no money possible in the Middle East, etcetera? Being aware of that, Scoping the market, we see there are some sweet spots which exist, and we would like to make some progress in those. But I think I would like to share that as we move forward. There is no point at this moment sharing what our strategic intent and what we want to do. Rather, we have something to talk about then. Okay. My last question is on the e commerce. You did mention that there is a team which is there, which is responsible. But could you talk something about the 0 gray and how many products which we have now on e commerce And some more color that how this business will look at, I mean, which are the other platforms we are using for this e commerce platform? Okay. So e commerce, I mean, again, right question. So Zero Way has been doing well. I mean, obviously, it is not a large brand in terms of value Market that we want to do some huge make a big difference to our top line or bottom line. It was supposed to be a statement. I think the statement has gone well. Consumers have had a good liking for the product and the product has again grown well in this quarter. Is it at the Kind of levels which where it will make whether it will move and shake, the answer is no, but then it is part of a larger The other thing that has happened out of this 0 grade launch, which is more qualitative than quantitative is basically a lot of learnings for us. I mean, how do you manage a premium brand with a premium packaging? So a lot of learnings, which will help us maybe with the launches that we are planning in the next quarter or As far as the next two quarters as far as e commerce is concerned, yes, there will be a number of products we will be launching in that because as we discussed in earlier question, the final end goal will be to have a D2C, which is a credible, Sustainable D2C. We understand the value dynamics as far as this business model is concerned in terms of how much of cash So we are also managing that Kiki properly. So it will not be in the wow mamaearth range, obviously, as you can understand. But I think still there is a viable So this is something that we would support. As far as the existing range is concerned, that all of it is being channelized through the e commerce. And as we are getting more and more Newer e retailers, ADHO itself is showing good growth, but also some of the products like Brahmi, Amla, etcetera, is basically on the higher end. We wanted to consciously push Brahmi Amla because we see potential for that product. So and those have been doing pretty well. So 0 Pre, Amandroft, Bramli Amla, etcetera has been on the on that platform, a bit of no mark as well, but more importantly with the new range coming in, IEC, Good potential for that. Thank you, Jaydeep, and all the best to you and the team. Thank you, Taresh. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi, sir. Thanks for the opportunity. So my first question pertains to margins and you spoke about the near term pressure, but I was coming from slightly Longer term perspective. So if I see FY 2016, we had 35% margin and then obviously there's an NDA impact also in between. But we exited last year with somewhere around 25% margin and this quarter because of all the pressure that you spoke about, We are actually at one of the lowest. So some of this was designed based on the commentary that we have been hearing from the management for last many years that They wanted to operate at a lower margin and then to make the balance between growth and margins sustainable. So where do you see this point now because 25% is something which is not very high versus the rest of the industry And do you believe that at this point from at this margin you can actually balance the growth aspirations versus profitability aspirations of the company and the management? Or you believe that You want to take it back to mean revert to 30% in due course of time? See that 30% am I audible? I think there's been some changes Yes, sir. I just wanted to understand. So coming you see the 30% is a nice If you have, as we discussed, only DHL kind of products with that kind of equity and that kind of margin. Now ideally, I would like to have that. But is that really plausible and feasible? Because ADHO, I mean, whatever stance we take, beyond the Certain point growth in ADHO will have to mean that either the market itself booms, the heroin markets, which being a mature market, there is a limit to which it can Or the LHL as a category itself takes a large leap, which again sounds a little difficult to achieve. So you may reach 11, Well, maybe 13, if you have every single activity right, whether it be your assortment, whether it be your placements, whether it be I mean everything, your marketing strategy in terms of reaching out to the new age customers. If you have a larger than that aspiration, you will have To play in all the categories, not only payroll, but also in some of the other adjacent categories where Bajaj has the right to win, which is the strategy we are taking. The fact that, that is assuming that Payal Yamandrov cannot be attacked at all, which itself is a thought process. I mean, it can be very choppy will be attacked even though it's the Best possible brand in hair oil to the best equity it can always be. And it had been attacked until we So given that situation that 30% is at nice European thought process, but of the sustainability So given that the options that we have, I think you will have to come to something where the top players are at in terms of EBITDA, maybe keep it to yourself at a But then also build brands to ensure that that keeps getting supported. And I think we now We are working towards that and I'm confident that we will be able to build that 3 brands as I keep talking about, which is that 100 crores plus for our size today, which will keep supporting Amundrof. Amundrof continues to grow at the pace that it has to keep getting some few percentage points, That has to happen, your margins will fall. And I would like to stabilize at that 25 percent margin and with this kind of healthy growth that I am pretty comfortable. The manager the Board at least is P. Vijay Kumar:] Sure. But sir, interestingly, we have reached that 25% without Making a lot of diversification or visible diversification of in our revenue pool yet. And if I see the 50% of erosion of margin actually came from one line item, which So should we believe that as growth comes from new products or growth revised in core ADH also, This 5% erosion which happened from employee costs will actually shift to other expenditure to support new brands and hence 25% Despite all the initiatives that we'll take in the new brands will remain at that level and there won't be further dilution because of those new launches. So, see, if you do the math on Q1 and take that percentage on the lower base, yes, this percentage will look exactly like the way you Okay. But you just shift the scale to, let's say, Q4, which was more of a normal quarter, right? You look at the HR cost and you will see for yourself how many percentage points it is lower there. And I think those that is what you will If the market situation remains normal and that will always be an assumption. If market situations Do not remain normal, then nobody can sell to. But if you look at the market situations remaining normal, which was, let's say, Q4 of last year, Your employee calls that you talked about was about 2.17% lower, right? And as sales grows, These percentage based economies of scale will follow. Being a smaller company, every single blip that happens, the percentage goes haywire, Both positive as well as negative. I accept it and also go positive in that. But I think as you build scale, these are numbers will get a little flattened up. So for example, just to give an example, the fact that sanitizers with a contribution we had a growth of 9 I am not sure whether many of the other SMC companies which just started sanitizers would have a 9% increase. And hence the growth for us has a 10 point difference of a 10,000 growth going to a 20% growth this quarter. So as highs increases, these numbers will have lower impact. That's what we are planning on and I'm pretty comfortable that that is the direction that it is. It is a basic fundamental thing to be known. Very helpful, sir. So my second question is, you spoke about interventions that you made in last 12 months in the talent pool of the company. And now we are ready for strategic intervention. So any 1 or 2 strategic measures you would like to talk about which we will pursue in this fiscal or next fiscal? So these are the ones that we talked about in terms of 3 things. 1 is obviously in terms of the brand launches that we are looking at in portfolio expansion both in e commerce as well as GT, I just talked about. So that is 1. E commerce has a business itself, which we want to push through. This is I'm talking pure from the business point. And 3rd is obviously in the area of basically international, which we want to talk of maybe in the next Fiscal, you will see some things moving. This fiscal will be more scouting the thing. Unfortunately, we are not able to also make this visit, which will be very, very necessary for International for you. But at least we seem to have our thought process in order and at least we are going in the right direction. So this is as far as the business, the front end side of it. At the back end, there are a lot of activities that are happening, which is not maybe visible to the IE directly. But in terms of ESG, there are a lot of work that is Initiatives in terms of securing our manufacturing system, making it far more robust, safety initiatives, etcetera, I mean, making efficiencies of scale. In terms of IT infrastructure, which is not really very strong for this company, we have been making it as close to any of the best in practice. So those are the backend work that is happening just to strengthen these organizations with backbone and such. So those are the work that is also happening And these are definitely would not have been possible without the talent pool that we have bought. Fair enough. And sorry, if I may try my luck here. If we have to convert these measures into some strategic number and not near term, let's say, slightly medium range planning, We have been stuck in 800 crores, 900 crores turnover range for last almost 5 years. So if let's say even in next 7 years, which is just 10% If we have to add 800 crores turnover more, what's that composition be? Or what will be required So firstly, I mean our ambition is a little more than that. But yes, but I am always very wary of making These number of commitments because again, as I keep saying that we need to walk the talk before you start believing us that these numbers are possible. So Really speaking, some of these measures that we see and whatever are common learnings and most of these people that we are talking about who is in the management Committee today come from very large successful organization. I come from 1, but others also come from equally successful organizations in FMCG as well. And most of the things that we see as to what they have also gone through this journey is this getting the basics right first and having a certain Initially, we'll be in the 1st year, 2nd year and then in the 3rd year, 4th year. It will not happen by magic and I am very comfortable not having a magic and having Because if we have these basic processes in place and we have that belief and consistency, I think the numbers we've achieved. And These little steps that I talked about is basically in that direction. I'm pretty comfortable with that. So the numbers that you We've talked about or at least in terms of direction, I think we have a little more ambitious than that. Great, sir. This was very helpful. Thanks and all the best. Thank you. Thank you. The next question is from the line of Ektar Singhvi from Valium Capital. Please go ahead. Hello, sir. Thank you for the opportunity. Hi. Hi. So I just wanted to know that our rural growth has benefited in the last few quarters because of the expansion Distribution and very good strategies like the van sales. So how sustainable is this rural growth? And just wanted to know your view on the rural growth going forward? In fact, if you ask me, that's again a good question. So rural growth, as I said, I mean, after the April, May or rather the April fiasco that happened for us and May just was more consideration. June, July itself is telling us that, That is clearly a sustainable thing because the way we were able to bounce back so quickly and come back to exactly the levels that we were at, We were very as we ended April and as we were in the middle of May or ending of May, we are really worried as to how the quarter will look like. But the kind of recovery that happened and that continues in July, even August looks like that seems to be sustainable. And now What has also happened as a result of the bank sales is the kind of learning that has happened as of that is letting us go even one mile further. And that's why some of these launches that you are seeing happen because it gives us it makes us believe that we have a better assortment. I think this penetration can further go up. I think in terms of numbers, we are still not completely exploited as far as rule of this concern. Having said that, we also Which was decided by the team here, which is basically that while our rural drive continues and rural will continue, I think in urban, We have been more a wholesale dominated company and our retail presence has remained weak, which we have talked in the last two quarters, which is where the focus Had started Delhi, Bombay initially and now into 10 cities and that has been giving some fantastic results. As I said, this 40% growth is clearly, I mean, last Yes, we accept that retail was low. But as you say, even wholesale was low. But this year, wholesale is negative. Retail has gone 40% positive. And Clearly, those initiatives that have been taken as far as retail drive is concerned is gathering momentum and we are seeing positives. So both rural as well as urban retail will remain continuous focus for the company, and I think the company's GT's strengths will obviously accrue out of that as well as with the assortment which will only help augment the business. So pretty substantial in my mind. Thank you for that. Also, you had mentioned earlier that the ADHO premium quotient will only be up for the gross margins to be at the existing levels of probably even above. So, the other competitors have also launched premium product. So what is your outlook on the demand for such premium SKUs? So there are 2 categories then if you look Because of what AVHO has done in the past in the last 15 years or so, I think it has created a New category of light there oil, right? So I will still like to keep while light there oil is premium, it's not like super premium. It is on the Higher side of the, let's say, of the normal oil. So that category will keep existing and we'll keep upping our tempo because we feel that If ADH has to keep demanding the kind of premium, it has to mean something extra for the consumer, be whatever equity it has. We have to keep maintaining that equity and that is a drive that you will see continuously happening in ADHO. Communication will change, Our entire approach towards ADHO will change and maybe next year even the product will go through some kind of a revamp because we want to keep it continuously It's making exciting. On the other side, as you're saying is the, let's say, the resurgence or Insurgence or whatever is the word you want to use for the premium heroics, which you are seeing in for through this entire drive on e commerce, etcetera, Premium is happening across all categories in SMTP. So that niche category, whether it will explore tomorrow or not, we don't know. But that Category clearly exists. I mean, there is one, obviously, large player which is pushing that category in the GT itself, but there is obviously a large number of E commerce players who are there. So that is a category we feel that will happen for the Ranish Nuance customer that is something that will always be there And you see us also getting into that category as well. So I will still keep common category not really in the premium category, it is in the high priced But the other is the premium category. Both different, really speaking, interplay between them may not be too much because the price difference will be quite high. There'll be some bit of interplay, but that happens in across all segments. Yes. My last Question is that, so we have recently launched a lot of covariance like 0 gray and amla aloe and also coconut oil and all. So what will be the strategy to drive growth and to gain market share for these kind of products? And also are we looking at acquiring any regional brand to gain market So again, good question. So 3 products, very 3 different strategies, Amla Alogera, I'll start with that. That will be that is clearly today our 2nd flagship brand after ADH. So maybe flagship may be too much of a word. But Yes. Clearly, something that we can drive. We feel that we have good rights to win in that. That's not a right to participate. That's a pure right to win. And whatever initial signs we have, we see that that business has been going well. I mean, I should not be talking on July, but July was the highest ever And I'm not saying that it coincides with the TV ads, which have started Coming in, but we see that Amla has a great potential and it is doing well for us. So no worries about Amla's concern. 0 Grey is a product which I said are 4A into premium end through a digital first brand. So a lot of learning is coming out of that. It has had good impact, But we were never expecting the kind of numbers that we are talking about as far as Ambala or any other product is concerned. So we are pretty happy with the kind of learnings, kind of Market understanding that we have got and kind of business that we have got in that. So we will keep it like that. And then the other products that we launch will have a lot of learning and help from that. So Zero Wave Fulfills our strategic intent there as well. As far as Coconut is concerned, I have highlighted why we want to get into Coconut so that it helps us in distribution as well as also The bank, so we'll play coconut like that. So 3 different products with the 3 different strategies because we are looking more at the future and how these products fits In the future context rather than these products in isolation. All of them I mean, Amla is in isolation, but other 2 is more for the future, What we are looking at our basket and how these will shift. So that's more for that. Okay. Thank you. Thank you. Thank you. The next question is from the line of Abhijit Kundu from Antique Stock Broking. Please go ahead. Yes. Hi. Thanks for the opportunity. My first question was on getting into a new category. You have entered into categories like coconut oil, No, the larger ones, coconut oil, Amla, Almono, Linger's, Roger, Would you plan to get into the natural anti hair fall category? Because that is one Where in your geographies, your strength geography that has got a bit solid. So anything on that? You're talking about anti hair fall? Yes. So if you look at, I mean, one of the biggest claims for Amundrof itself is anti hair I mean, that is what we have been dialing up. If you look at our entire directional stance that we have taken on almond drops is to make it a more Functional brand. 1 is make it a more funkier brand in terms of attracting making it attractive to the newer age customer, but also make it more functional. Earlier, it was more an Irrational brand, luxurious brand, so luxury, styling and so on and so forth. Slowly, we have taken the stance of it being a functional brand because People paying that extra premium for a product need to see a value add. So you see these new 2 ads that are coming out in terms of Lab test coming up showing how it is stronger, how it is reducing hair fall, etcetera. So almondrox is clearly on the Here, full time. That's why you see Amla where we have changed subtly changed other things. So that's talking of silky, luxuriousness and If you were to look at both of our ads, that's how it is very, very different. So this is what we are pushing as far as brands are concerned. But if you're looking at specific just only anti hair oil, yes, we might be looking at some of the premium range of products. Exactly. Not only the anti hair oil, but there will be many other criteria as we are looking at, whether you are talking about this argan oil, or the onion hair oil, etcetera. Being a hair oil player, we are also scanning those markets and also looking at what where we feel we have some rights to win. But there unlike, let's say, a coconut There we look at how can we offer a differentiated product in a cluttered market, so that at least we can have some consumer eyeballs there. That is what we are looking at and that will give a curated content as we go forward with the launches. Okay. And just some data points, What would be our rural contribution to overall sales and rural contribution And also wholesale contribution to overall distribution. And in terms of Direct decision, when you have been penetrating markets or servicing markets better through your WAN operations, But are we also appointing sub stockings or what would be the number in terms of Distribution now versus 1 year back or whatever period you can take? Okay. So, Abhijit, let me start answering before he forget. So the first question is rural to urban. So as I said, rural has now overtaken urban. So it has a higher than 50% contribution. Urban is lower than that. That's it, that's it. Just a little higher than 50 as well as rural is concerned, just a little less than 50 as well as urban is concerned. So there are about percentage points, I Don't want to get in the exact number. If you want the exact number, just a little higher. Let's put it that way. So about 3%, 4%, 5% difference between Algonquin Group. So this is where we are. So $52,000,000 $48,000,000 let's say, if you want to take a number. In terms of the other question is very important to me. And in fact, that's a far more important question to me, the distribution of Retail and wholesale in the business. Now out of that 50% in urban, we typically used to operate with a 15, 16 to about 30, 32, 33 kind of a thing, which is really close to half of the thing. And that in my mind is one of the key Let me put it the way key area of improvement for the company that retail needs to touch wholesale in terms of overall number Understood. Because that is a base trend that you would want to put in as a company because you will want to have a control on the channel that you have. And that is the right direction we are going to. That number is now up to 20 30. So 20 30, we are now having a 20 Percent coming out of retail and 30%, rather 40%, 60% if you want 100% being audible. So 40%, 60% in this thing, which we'll now push for fifty-fifty And not by reducing wholesale, but by upping retail the way we are paying. So that is going in absolutely the right direction. So This is sorry, you had to ask the 3rd question, it was a 3rd question. Yes. In terms of pure Direct distribution appointment of maybe sub stock is increased in sub stock is all distributors now versus 1 year back or a year back? Yes, correct. So again, distributor numbers remain over 1100 out. So there is if you ask me, has there been a large increase in the number of distributors or not? The answer is no. But what we are looking at in terms of rationalizing some of these The underperforming distributors, etcetera, I mean, those corrections have already been done. Not major number changes happened, but yes, we are looking at foot on ground Increasing the number of subdis, I mean, that is something that we are wanting to do as our band sales have improved and our direct distribution went up from 5.5 to about And I have 9 or lakhs as far as numbers are concerned. Now we are also looking at how we can have a little better direct non than approach towards that. So That strategy will keep on working. I mean, obviously, situations like COVID in rural, etcetera, does not help in that. But on the medium to long term, that is what we would want to have more sub names Directly for us, fit on ground so that we can control that network and not only through line sales. So this is the gradual upgradation that will And we are in the right direction for that as well. Okay. On any sense, report any sense on Expanding your penetration in your non core geographies like So have you found some promise in More geographies and there you have expanded your distribution. I know last 1 year has been 1.5 years has been really Difficult scenario to really do that, but anything on that? So again, This will be in 2 parts. If you're looking at increasing distribution, there'll be 2 parts to it. 1 is obviously where you are Represented poorly or sub optimally. Obviously, the upside is high, but difficulty of entry is also high. So that is what we are trying to address with some of these launches that we just talked about. So at least be able to have some presence in this So Southwest where we are a little less represented. But the other part of it is also while we are doing that, it is also looking at also increasing penetration in places where you have high market Because our 20% is not high market share. When you're up for 50,000,000 market share, then you can talk of high market share. So there we still see potential then that's what has come out. I mean in places like Punjab, etcetera, many other states, I don't want to mention all of that. But all of these, we have seen great upside happening because of just our ability Go further deep into the distribution into even lesser villages. Chitna last mile, we have been able to cover all That is something that we will continue to exploit further and further. We were with the SKUs that we had launched in EDH, the smaller packs, So the rupee pack, etcetera, as well as on the other side, Amla that has pushed. So it has helped in the Northern Belts where we are market share was high, But still book distribution advantage. Now we are pushing the ones which is with the inward distribution with the lower market share. Okay. That's it for myself. Thanks a lot. All the best. Thanks, Hari. Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to the management for their closing comments. Over to you, sir. Thank you so much. First of all, thanks all of you for an engaging interaction. I think A lot of interesting questions and all of you must say. I would think a little setback by the kind of growth that we have had. But as I said, I mean, I am not really that concerned because the reasons why we saw this lower growth with Central and Wholesale etcetera has all come back in So I would be more keen to see how our Q2 and Q3 goes, and that seems to be right on place. Also, I'm happy that all the plans that we have stated at the beginning of the year, even though there was this 2 month impact, none of the time lines of any of the initiatives have changed. Our initiatives exactly remain as per plan. So while April has been a disaster, the total overall in terms of keeping track of Where we wanted to go as far as top line is concerned remains. Bottom line, we knew would be under pressure. It is under pressure. We will continue to monitor that. I don't think further bottoming out is But we'll have to come back a little bit as far as the bottom line is concerned, which is what we'll try and do both in terms of looking at What kind of price increases, if any possible, and in terms of sourcing, but a lot of the supply chain efficiencies that will start slowly building into the system, which will have its own impact So overall, more or less, we sit in a comfortable position. The team is in place, and we are just reading to see what happens in Q2, The balance part of Q2 and Q3 and let's see how the balance will be. So thank you all for joining our meet and Thank you. Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.