Q1 18/19

Jul 16, 2018

Morning, everyone. On behalf of Kotak Institutional Equities, I welcome you all to Bajaj Corp's Q1 FY twenty nineteen Earnings Call. We have with us the senior management of the company represented by Mr. Sumit Malhotram, Managing Director Mr. Sandeep Verma, President, Sales and Marketing Mr. Dilip Malu, Chief Financial Officer and Kushal Maheshwari, Head, Treasury. I would now hand over the call to Mr. Maharupra for opening remarks. Thank you, and over to you, sir. Thank you, Jay. Good morning to all, and welcome to the conference call for articulation of the first quarter financial year twenty eighteen-twenty nineteen results for Bajaj Corp. With me are Sandeep Vermaq, President, Sales and Marketing Philip Malu, CFO and Vice President, Finance and Kushal Maheshwari, Head, Treasury. After many quarters, we are seeing all the indices of the company's performance like turnover, value volume, EBITDA, retail offtakes, market share, etcetera, showing positive growth. During this opening address, I'll be getting into each one of them and then we are open to questions. The company closed the quarter with a turnover of INR215 crores. The growth in turnover vis a vis the first quarter of last financial year is 9.45. The volume growth is 8.7%. The EBITDA for the quarter is INR70.48 crores, which is a growth of 13.9% over EBITDA of Q1 in the last financial year. The EBITDA to sales ratio is maintained at a very healthy 32.8, which is 128 bps improvement over last year Q1 EBITDA to sales percentages. The PAT and the PBT for the quarter are at INR53.77 crores and INR68.53 crores respectively. The growth in turnover on a tax neutral base that is accounting for the difference between the VAT and the GST regime is 13.2%. After eleven quarters, we are seeing double digit turnover growth even though there has been a base effect of GST last year, last July. The encouraging news is that our lead brand has shown a volume uptake growth of 10.5% this quarter. The main reason for this is an improvement in the growth in the rural areas. As against the 4.8% growth in the previous quarter, our lead brand Bajaj almond drops has shown a 11.9% growth in the rural areas this quarter. Though GST still is causing some concern, this concern is now largely on the refund of the budgetary support announced by the government for the erstwhile excise free zones in the heavy states. We have started receiving a small part of this refund, but this company still has to get a refund of INR 21 crores for the last four quarters' refunds. We are seeing a very robust growth in our domestic hair oil volumes. This is led by the growth in the modern trade sector, which is 36.25%. General trade, which is largely sales to traditional retail formats, has also shown a very encouraging 17.5% growth. While sales in CST normally grows in tandem with the retail sales, orders from CST are showing a very erratic trend. We believe that it is difficult to predict what their strategy is and therefore do not expect any major growth from CST this year. On the other hand, the reboot of the international business is towards the last stages of implementation. We expect that the positive results would be visible in the third quarter of this financial year. Even though the offtake volume growth in total Hair Oil segment that including all the brands has dropped this quarter, the growth in light hair oils has actually picked up. The volumes of total hair oil has grown by 2.6% quarter. On the other hand, due to the rise in coppra prices, the hair oil value growth have jumped to 11.3%. As against the volume growth of 3.6% in the third quarter, volumes of total hair oil rose to 4% in the fourth quarter and have now fallen to 2.6. On the other hand, the Light Hair Oil segment growth and volume has picked up. This has been led by a smart increase in rural growth. So rural volume growth of Light Hair oils have jumped to 5.3% from 5.3% in fourth quarter to 9.8% in this quarter. This led to a volume growth of 6.7% for the complete light aeroils segment, whereas our lead brand Bajaj Amand Rock has driven the growth in light hair oil with a growth of 10.5% this quarter. Improvement in volume growth of light hair oils and even better gains by our Bajaj Amandrop brand has resulted in an all time MAT market share of 59.4% in volume terms and 61.8% in value terms. As predicted in the last quarter's con call, the turnaround in light air oil volumes largely driven by almond drops is well underway. We expect that with a good monsoon and various rural income growth programs announced by the government, this growth trajectory should continue in the next couple of quarters. Along with our market share gains, the effort to increase our direct distribution has resulted in an all time high distribution of our lead brand. The brand is now available in 39.67 lakh outlets. The direct distribution currently stands at around 4.8 lakh outlets and our aim is to reach 5.4 lakh outlets within this financial year. This increase in distribution is led by doubling of our direct rural reach over the last one year. Along with the improvement in direct reach, the use of automation by all our sales personnel has led to better controlled and efficient targeting of the right kind of outlook for our products. This quarter's stock saw the restaging of our skincare brands, Almond Drops, Bajaj No Mask. The national launch happened in mid June, then enthusiastic response from the consumer and the trade has driven the brand to a 41 value growth during this quarter. In fact, June 2018, we saw the highest monthly primary and secondary sales for this brand since July 2015. The new packaging and the new communication strategy with Tafsipanu as the brand ambassador has been widely appreciated by the consumer. This restate has been driven by the innovation center and is the third in the line of launches that have been planned. With the confidence that we have gained with the three launches, we expect the next round of launches to be larger and more exciting. The previous launches, Bajaj Brammy Amla, Ayurvedic Air Oil and Bajaj Cocojasmin has shown early signs of success in the geographies where we have launched these brands. There has been a pressure on margin, which remains high due to the increase in crude oil pricing as well as the rupee depreciation. On a quarter by quarter basis, light liquid paraffin has gone up by 20%. Even after accounting for input tax credit, there is a 3.7% rise in LLP prices. On the other hand, refined mustard oil has gone up by 14%, which is equivalent to a 8.6 rise post ITC and glass bottles by 6%. This quarter, most of the negative effect of these RMP and cost increases have been contained due to increase in prices or MRP's in April 2018, maintaining stock of lower price RMPM and the ITC or the input tax credits that we have this year. However, if this inflationary trend continues, we may have to look at another price increase this year. Another standout feature of this quarter's performance is the difference between the growth of the operating profit and PAT. This difference is on account of the stark decrease in our other income. As per accounting standards, we have recognized the fair value of our investments in corporate bonds as on thirtieth June. As a result of this, the reported other income in the first quarter of this financial year has fallen from INR11.06 crores last year the same quarter to just INR1.17 crores. This drop is on account of mark to market losses, which you know are only notional of around crores. We have invested all our funds in AAA rated bonds and hence there is no real loss, but due to the sudden depreciation of rupee rates in the last two days of June, this mark to market losses have had to be recognized. The positives we have witnessed during this quarter are a, growth in volumes in light hair oil industry led by improvement in rural volumes, improvement in leadership position of our lead brand, improvement in both volume and value market share, C, a very healthy EBITDA of 32% despite strain on RMP and prices D, marked improvement in distribution led by improvement in direct distribution and deeper penetration into the rural sector And lastly, a highly visible launch of our new Ayurvedic bazaar Nomarc and the new strategy thereof. We are now open to questions. Sure. Thank you very much. We will now begin the question and answer session. We have the first question from the line of Avnish Roy from Edelweiss. Sir, congrats on good volume recovery. My question is on the Antimax category. The growth rates are slowing down significantly for the past four quarters for the category from 48% to 35%, 22%, 9% and now 7%. So if you could explain why this is happening? Is it because of any specific Nielsen issue? Or is it that market share loss is happening to some of the smaller players? If you could discuss that. And in that light, your relaunch of your own brand, does it make sense if actually there's a category slowdown? Abhi, this is Sandeep here. See, one of the things one of the reasons for the 40% or the 50% -plus growth rate that we were seeing in the anti mask category earlier was also because of the entry of many new brands. Now that entry of new brands has obviously slowed down. Most of the brands are which are there in the market now in the category now have been there for more than a period of one year. So that is one reason that we can see for the slowdown. Other than that, we see absolutely no reason from a consumer impact perspective or from a consumer demand perspective into the category. We still believe very strongly that this category is going to continue to grow at a CAGR of 25% to 30% plus over the next three years. We have relaunched on account of our long term interest into this category without taking the current short term slowdown into purview. But normally, new players come, they do expand the market for medium, longer term perspective, right? Yes. Such a sharp dip. And doesn't it mean that competitive intensity also would have gone up because so many new players have entered? So the competitive intensity has definitely gone up, which is why the need for a relaunch in any case. You can't continue to play in the same category with the same set of rules with your existing mix. If you have new players coming in and changing the rules of the game, which is what has happened in the category. And that demands a complete relaunch, which is what we have done. So what I'm saying is that, yes, there is there has there continues to be a category growth. But like you said, it is not to the extent of 40% to 45% that we were seeing earlier because there have been no new brand entries as such to further growth from that perspective. Next question is on Bajaj Brahmi Amala Ayurvedic Hair Oil and your Jasmine Hair Oil. These two are seeing a very good growth, obviously, a smaller base. And in your future outlook, you have said you want to keep driving the offtake. So my question is, currently, this high growth, is it coming from the competition? Or is it just expanding market? And what exactly are you doing in terms of driving offtakes? Is it the pricing part? Or is it the distribution, which you have discussed in the presentation? Is that driving mostly the offtakes? See, both the brands are in completely different stages of growth. Vis a vis Vajj, Cocojasper, we still believe that these are early days. So most of the gains in offtakes that we are seeing is largely because of our distribution expansion per se. On the other hand, Bajaj, Brammeer Abla, Ayurvedic that you are seeing, the growth in offtake that we are seeing is we believe we are getting back some of our legacy consumers. If you recall, this is obviously a heritage brand. And a major reason for one of one of the major reasons for it becoming so small is because we actually lost majority of our consumers. So we believe that a lot of the early stage growth that we are seeing is actually from the lapsed consumers of this brand who had moved on to some of the other brands. But just to repeat, in the case of Cocojasmin, this is largely on account of increased distribution, as you pointed out. We still feel that it's very early days that currently what we're doing in both Vedas, Cocojasmin and on Brammy Avala is to continue to increase our awareness by continuing with our television and other campaigns and also on focusing on the coverage part, especially on the Kokojasmin front. And the last question in terms of the innovation. You have said in Mission 2020, cultural innovation is going to be extremely key and that way across the globe. So my question is, how do we quantify this in terms of your R and D spend or in terms of new launches? Next two years, are you able to quantify it? I do understand it will be much higher than in the past three years, but are you able to quantify these two aspects? See, our R and D comparing our current R and D expenditure with our R and D expenditure of the past would probably not be the right measure simply because of the low base. What I mean, what we can actually say is that our R and D expense has gone up by about four to five times. But like I said, it's really on a very, very small base. We will continue to invest behind R and D. So the other spends on R and D will continue to see an upward tick. We believe that we will get by the end of three years, which is basically by the 2020, we expect to get almost 40% of our incremental growth coming in from the new innovations or innovation that we have done this year or we'll continue to in the next two or three quarters. So that is our goal. FY 2018 would have been how much in terms of that number? FY 2018, like FY 2018. FY 2018 is very small because our big relaunch has just happened in June. And this innovation is defined as in the past two years or three years? No, only in the last well, we only innovated in the last three quarters, if you remember. Okay, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Marti Undra from Citi Equisearch. Please go ahead. Good morning, sir. Sir, what's the status of an expansion activity in Baroda? See, we have begun the designing part of it. As you know that for such a large facility, we need a lot of time in terms of designing it. But once the designing is open or closed by around July, August, we should start construction sometime in September, October of this time. And from what capacity are we eyeing in that plant? We are trying to get around one third of our expected capacity need for next year from Baroda this year. Okay. And so what's the capacity utilization of the Guwahati plant? The Guwahati plant would be currently very close to 70 odd percent and we are trying to build that further also as we go along. And then all the small plants would stop being operational and we would have three large plants based in Ponta South, Guwahati and Baroda in, let's say, two years' time. Okay. And sir, if you could just throw some light on the sales from the IB division for the quarter? It's actually next to zero. And the reason why we took this step was we wanted to clean up the infrastructure being the stock line at our depots, stock line with our distributors and start on a clean state. This was also the time that the new team came in and we didn't want to burden the new team with the old issues. So you'll see that there's a major drop in IB this quarter. From next quarter, you'll see a much lesser drop and the final third quarter, you should start seeing some growth coming back. So this drop is because of decline in offtake from the consumers? No, no, no. It's basically your pipeline stock that has been dried out. All right. Sir, offtakes last month in June was the highest in three of the geographies that we exist in, which is Bangladesh, Nepal and So it's not offtakes, it's rather cleanup of the pipeline. All right. And sir, why is the sales volume of Amla Heroin category getting depressed? Amla is a if you're talking of plain Amla, which is the low cost warrior, we are not focusing on that at all. And whatever sale is happening, we are letting it go. We are not investing behind the brand because we believe that there the differentiation between the other Amla brands is the least. And until you can find the differentiation, you really don't invest in communication on such brands. All right. So thank you so much. Thank you. The next question is from the line of Manoj Menon from Deutsche Bank. Please go ahead. Hi, team. A few questions. I'll actually take one by one. So the first, the confidence on, let's say, price increase, which you may have to do this fiscal as the covers go away by August. I'm sorry, I just missed your initial brief. If you just covered it, just request if you could just address this price increase confidence thing first. In terms of confidence, Manav, you can either go by legacy, which is I think not worth it because three years we have not taken a price increase. But the price increase that we took in April has really gone through and that shows through in the kind of volumes and off takes that you're seeing in the market there. Second is also that if the price of light liquid paraffin and the other raw materials keep rising the way they are, you really don't have any choice but to take it. So it's largely due to confidence in volumes not dropping after the recent price increase and more because of necessity. Okay, understood. Secondly, on a two year CAGR basis, your volumes are largely flat. But while it is an improving trajectory, you could just help us understand the basically the recovery, so as to speak, which is seen in ADHO, is it macro, micro? The context what I'm asking is that you had a lot of disruptions the last couple of years because of managerial changes, process changes, etcetera. Do you think it's all completely behind you? Or is it still holding back some of the growth? Yes. So if you look at internal changes, I think it's behind us. But if you look at external like DMON and GST, I don't have any control over that. So I can't comment on that. But I think the basic thing and I harped on it during my opening address was the rural growth coming back. And sequentially, if you look at it for Almond drops and light air oil quarter by quarter for the last three quarters, both have been rising, which means that the total growth of light air oil and the rural growth of light air oil has been rising, which is a sign that we were looking for in my last results, Concord. I had pointed towards that saying that the trend is positive and therefore, I believe that light air oil growth are coming back. So actually there's a sub question here actually. Is it fair to say that some of the recovery in growth which the premium oil which you belong to is also because of the very high ticket size for a coconut oil currently? I don't think you can divide it like this, but because yes, if coconut oil price is the only reason the consumer would have gone to the lower priced paumla, So why would it come to us? But yes, on the other hand, also the gap between coconut and light air oil has decreased. And there could be possibly an option there. And that's why our advertising communication is focused on converting people from heavy hair oils to light hair oils, notwithstanding the price gap. Okay. At 9% employee cost to sales, I know that percentages sometimes probably higher more than what it actually reveals. Would it be fair to say that there is leverage for you? Or is it that, let's say, the employee cost for, let's say, FY 'eighteen sorry, 'nineteen and 'twenty could also still grow in double digits that you will not probably get leverage for the next year or two? Yes, I'm not too bothered about that. I'm bothered about the leverage we get from these increase in employee costs. If need be, we'll continue investing behind manpower because that's the biggest differentiator between a good and a great company. And looking at our margins, looking at our EBITDA, I think there's enough scope to absorb, if necessary, any further rises. But looking at it from today's perspective, I think we are more or less there. Guzumit, actually the question here is, when I look at your organization chart today versus let's say what it was five, six years back, it does appear to be significantly better staffed in terms of line functions, etcetera. The question here is, is it 70%, 80% of those investments is already captured in this 9% or let's say, hypothetically speaking, can this 9% be 1011% in the next couple of years? I think you have used the right word hypothetically. It depends on how fast you're growing and what is the complexity of your business. As we stand here today, if you look at our kind of a business, I think it's good enough. But if you were to take a few acquisitions along the way, you need to bump this up again. And that's why I'm not giving you a definite answer on whether 9% or 10% is good enough, whether it will come down with increase in turnover or go up with the complexity increasing. Understood. Two small ones, know, Nomad, if I understand correctly is now is relaunched as a pure Ayurvedic brand, right? Is that understanding correct? Yes, perfect. So just to I mean, I don't know if it's a trivia question, but it's the name Nomax is English and Ayurvedic, how should I read this? You can read it like Noska is English and it's the biggest anti blemish cream or Fair and Lovely is purely English and it's the biggest famous cream in India today. Almond drops, which is growing in the rural area doesn't have even a single Hindi alphabet on the whole packaging. Okay. So no, no, the context of it, I'm asking is because I presume that Nomax is a predominantly urban product. And for whatever reason, most of the Ayurvedic brands, but is there in the market, at least the successful ones, has got some sort of an Ayurvedic connotation or a Hindi or whatever name. That's the only reason I'm asking that question. No, you're wrong there. The largest antieblemish is no marks and no scar is actually a steroid based antieblemish. It is not Ayurvedic. The second largest which would be fair and lovely is Ayurvedic, but it's also English. Okay, okay, okay. And lastly, looking at your annual report, have given the SKU mix in Page number 74. Obviously, we have seen a significant improvement or rather increase in the 300 ml contribution. Is there a big picture there or is it something cyclical which has happened last year? Okay, Manoj's bi request to you is not see individual SKUs, look at buckets. The bucket you should be looking at is the low SKU, which is the SACH A10 and 50, the mid one which is maybe one hundred one hundred, 200 and the large one, which is 300, 500. If you look at that, you'll see that $305,100 contribution to the overall saliency of almond drops is growing, which is a very healthy sign, which means that the entry into the household is in larger volume terms, which means that more and more people within the household using it rather than just being a SOLUS user. That's the leading you should take into that SKU is breakup there. Okay, understood. Thanks Sumit. Thanks, Sandeep, and all the best. Thank you. Thank you. The next question is from Manish Bodar from Renaissance Investments. Please go ahead. Hi, sir. I had a few questions. Actually, just wanted to compare, let's say, now going ahead, when I compare the LLP prices, let's say, in Q2 FY 'eighteen, in the presentation that you all shared, the LLP prices mentioned up there is 51.8%. Yes. So would it be right to compare that 51.8% to now incrementally to the 60.46%, which is now the landed cost adjusting for the ITC? Yes, you're right, because that second quarter of last year, GST has already come in, right? And therefore, you're comparing like to like. So about a 17% kind of inflation up there? Yes. Okay. Just on this cash position now, we've been holding cash for quite a considerable period of time. Do we have a time limit, let's say, till when I understand we've been looking for acquisition, but is there a time limit, let's say, let's say, FY 2019, if we don't get the cash and if we don't get an acquisition, we would look at distributing cash or something We have been distributing cash. If you look at our dividends, that's a distribution in cash. The only other thing I can do to deplete on my cash balance would be what buyback, right? So we are not looking at buybacks at this point of time. But in coming to your main part, which is acquisition, we are not desperate for an acquisition because we know that we could easily make a big mistake there. So we'll be cautious when we analyze acquisitions. But now with our confidence in improving distribution, second, launching brands and being able to support brands in meaningful ways, I would say the chances of an acquisition are much higher now than they ever were. Okay. And just one small bit. On this Ayurvedic oil category, is there any trends which you're seeing at household level that you would like to call out? Obviously, with the entry of people like Kesh King and Patanjali and Indulekha and all that, it's become an exciting category. And one of the biggest issues we have in hair oil is it's a very unglamorous category. And all of these Ayurvedic hair oils are making it a little more meaningful in the consumer's mind. And therefore, I think it's a place you should be in. But it's still an end product, let's say, when I compare your product, not let's say, with a parachute, but let's say when I compare your product with Ayurvedic Herald, it's still an ant product and it's not an or product at household level? Yes, it is an ant product. And it normally does medicine is always an ant product, it's not all. You don't lose your regular hair oiling habits because you buy Ayurvedic. Okay, fine. Thanks. Thank you. The next question is from Ashish Shannon from Allegro Capital Advisors. Please go ahead. Yes, thank you for the opportunity. The first question is in one of our previous quarterlies. We had spoken of the shift from coconut hair oil actually happening more towards Amla versus almond. Just want to understand has any of this changed or is that trend kind of still continuing? In fact, if you recall Manoj's question, one thing he alluded to was the increasing prices of coconut, improving the shift between coconut and other air oils. So what has actually happened over the last two quarters or three quarters is that because of rise in cokra prices, parachute the difference between parachute and other hair oils is actually reduced, right? And therefore, has speeded up in terms of volume terms. Earlier on, it was going largely towards the AMLA segment. I think over the last two quarters, it is coming back into the light hair oils also. But yes, the larger shift is happening towards the low cost standard. Okay, excellent. The second question is, when we're looking at the improvement in volume growth, especially in rural, I was just trying to understand how much of this could be partly explained by a base quarter that was impacted by GST? We are talking of offtake and GST did not affect offtake. If you go back, you'll see that the offtake was still there. The growth was still there in the first quarter of last year. So what you're most probably confusing with this, you're confusing turnover with offtake. So GST affected turnover because there was a decrease in stocking through your pipelines. The consumer didn't have any effect of GST. If at all the consumption would have gone up because prices went down after GST implementation. Okay, excellent. Buffy, that's very helpful. Just lastly, in terms of if you're looking at margins, one, we have certain raw material price pressure, we're looking at increasing both R and D and I'm assuming E and P spends on our new product launches. Is it possible to give a one to two year kind of an outlook on how do we see margins moving? Normally, we don't give guidance in these kind of a thing. But I think in my opening address, I said that if crude continues to rise, our margins will be under stress, not because of cost of investment in R and D or A and P, that can be managed. The thing that can't be managed is the raw material and packaging material prices. And you would realize this most of our raw materials and the packaging materials are directly or indirectly related to the price of crude. That is something that will affect us and we might have to take a price increase there. Okay. Just a small follow-up on that. In terms of how much was the price increase that we had taken in April? And how much of an assuming raw materials, say, where they currently are at, how much of an incremental price increase would we need to take to be able to maintain current levels of gross margins? I won't answer your second question because it's forward looking. In terms of that, if you take the increase in price and the decrease in volumes, the equated price hike in April would have been around 2.3% or 4%. Okay, excellent. Thanks a sir. Thank you. The next question is from the line of Aman Bhatra from Goldman Sachs. Please go ahead. Yes. Hi. A couple of questions. Just understanding a bit more in detail on this other income where you're taking this mark to market hit. What was the gain that you took into the balance sheet when you restated in June? Around INR 2.54% on mark to market 2.79 crores. 2.79 crores in first quarter of last financial year mark to market gains. And this time, it's minus point four No, this would be one quarter phenomena? Or when transiting to the Ind AS, you would have taken a larger gain, is it? No, no, no, no, no. It's basically at the last day of the month, if you have to sell your corporate bonds, what kind of gains or losses you would take? That's got nothing to do with the India asset. Okay. Okay. Understood. And these are essentially held to maturity for you, investments? It's notional. If I don't sell, I don't actually incur these losses. Right, understood. The second thing was on Brahmi Amla. I may probably might not be reading correctly, but have the reported revenues from Brahma Amulah declined over last year and previous quarters? Again, Aman, looking at revenues, you would see a different picture. Looking at offtakes, you would see a 20% growth in offtakes. Revenue is a mix of quite a lot of things. Last year we had CST, year we didn't have any CST arm, it's not there in CST. So it's a mix of many other factors, not only offtakes. What we are looking at for success in our brands is the change in offtakes. Okay. And the last thing was on more on the slightly longer term, believe there is ESOPs are being issued. So at what price are being issued to the new management? Let it get passed, Amand, and then we can say that it's not yet being passed. The AGM is on the twenty third, post which the NRC will approve it, and then only can we talk about it. Okay. Okay. Thank you. Thank you. Next question is from Amit S. From Macquarie. Please go ahead. Yes. Hi, sir. Thanks for the opportunity and good set of numbers on the domestic side. So my first question is your employee cost has gone up on a sequential basis from the 2018. Any particular reason for that? More people, more capable people building second line. Okay. In the domestic franchise or because you have Both, domestic, R and D and also international business. Okay. And this will be I mean, so I'm not asking for medium term kind of a thing, but this number will continue to go up over the year I mean, this year? Absolute, obviously, will go up. But once the efficiencies start coming in, the percentage will be stable or maybe decrease as we grow. Sure. Secondly, there on the international business. In the presentation, you have mentioned an ambition of INR100 crores by 2020. Just wanted to understand the roadmap, which are the countries where you are looking at the growth prospects? Are you also expanding in the additional countries? One thing we realized along the way is until you have a managerial strength, you shouldn't get into too many countries. So one of the biggest change in strategy is look at a fewer country and invest in these countries. Trading is not what we would like to push as we go along. So if you look at the countries that we are strong and we would like to invest in, obviously, the larger areas like Nepal, Bangladesh, the Gulf Region all new countries like Indonesia and all that, maybe we believe that there is enough potential for our kind of products, both hair and skincare, where investment will give you returns. So in terms of number of countries, I don't think you'll see a massive increase in number of countries where we would be participating in. But doing more consumer facing work, I think you will see more of this happening in the three or four countries that I mentioned. Okay. And lastly, on the A and P side, I mean, is it possible to give a breakup the kind of incremental spend which you're doing on your new products, for example, Brahmi Amla and Coco Jasmine? I would not like to break it up by brand. Okay. Okay. Thanks a lot, sir. Thank you. Thank you. The next question is from Geenal Jay from Multiak. Please go ahead. Good morning, Sumaji. Good morning, Geenal. So just digging back the comments that you were discussing earlier about coconut price going up. So there I just was slightly confused where are we seeing the conversion because of the price gap reducing or also where we're seeing a demand uptick? Just some thoughts on that. How can we separate both? There's a demand which will post the conversion. Both things are actually the same thing, because conversion happens when there is a demand, right? The demand may happen because of improved communication, higher disposable income, reduction in prices between the two competitors, right? But after all, it's obviously led by demand. Because from what I've understood with our conversations in the past where when there is usually a slowdown, you people are down trading. But here, because obviously the parachute prices have gone up, So I'm not sure if that up trading is happening or it's just what we are because of the parachute prices going up. In bad times, normally what happens is since it's a non risk category, the conversion itself slows down because people are not willing to take the jump between shifting plans. Yes, high inflation also causes down trading, but down trading would happen from coconut to low cost Tamla in any case. Now what is happening is your low cost is also growing but at a lower pace, but light air oil is picking up, which means that the economy and therefore the in the economy, the disposable income is now becoming a little better. So people are willing to take this choice of buying a little higher priced product. So that is why your positive commentary, unlike if it was for other reasons, you wouldn't have been as positive as what you're suggesting. Yes. And this is for the last two con call channel. Correct. I called it out last concall and I'm calling it out this concall. Fair. Okay. And on the second question, I just wanted to understand where even on the exports and even on the Nomax, where we are saying that the we've tried out the trade pipeline to support the relaunch. So is there a change in distributor? Just I mean what No, no, no, See, we had a whole packaging in the pipeline. Now normally when you restate size to that we have, we have actually changed everything in terms of look, feel. If I put both of the old and new, you won't recognize the product. Therefore, is always better to dry out the pipeline. A pipeline would normally mean your manufacturing units, distributors, wholesalers, but sometimes because you can't do it, you can't normalize it across everyone. There are some retailers that also get stocked out. At that point of time, you start losing offtake. So offtake has gone down because obviously the drying out that we did has affected stock in the retail area. So possibly a consumer who went asking for Nomad still not get it in the retail. Understood. And we expect this to normalize in the next one, two quarters? It's already happened. Okay, okay, fine. And just lastly, what's the update on our premises in Worley? No, that's a sore point, Dainal. We still have a few more permissions to get, but maybe when we meet I'll take you through it. It's something that I was never exposed to and after getting exposed to it's something I don't understand at all. Takes so much time to get up and I imagine to even remove the deadly that we have created because of excavation, you need permissions and that permission takes two months. So yes, if you would like it, we would like to move in tomorrow, but we can't because of the various permissions that are not there. Very well. All right. Thanks. Thank you very much. That was the last question in queue. As there are no further questions, I'd like to hand the conference back to the management for any closing comments. Thank you for logging in on to our conference call. I think the last three quarters have sequentially been better and better. And I'm sure that we will be able to continue this growth trajectory, not only because of the external factors, also because our team is now becoming much stronger and stronger and much more organized. And that would help us grow faster than the market and definitely faster than the light oil industry. Thanks a lot. Thank you very much. On behalf