Q4 17/18

Apr 26, 2018

Ladies and gentlemen, good day, and welcome to Bajaj Corp. Q4 FY 'eighteen Earnings Conference Call hosted by Kotak Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Jay Doshi from Kotak Securities Limited. Thank you, and over to you, sir. Thank you, Stanford. Good morning, everyone. On behalf of Kotak Institutional Equity, I welcome you all to Badajkov's four q f I eighteen earnings call. We we have with our senior management of the company represented by mister Sumeet Suneet Mahhotra, Managing Director Mr. Sandeep Bharvat, President, Sales and Marketing Mr. Denit Malu, Chief Financial Officer and Kushil Maheshwari, Head, Treasury. I'll now hand over the call to Mr. Mahhotra for opening remarks. Thank you, and over to you, sir. Thanks, Blair. Good morning to all, and welcome to the conference call for declaring the results of the fourth quarter and the annual results for the financial year twenty seventeen-'eighteen of Bajaj Corp. With me are Sandeep Verma, President, Sales and Architect Mr. Dilip Kumar Malu, CFO, and Vice President Finance and Kushal Mehreti, Head Treasury. The company closed the quarter with a turnover of INR $2.14 crores. The growth in turnover vis a vis the fourth quarter of last financial year is 5.01%. Consequently, the volume growth is 5.86%. The EBITDA for the quarter is INR 73.08 crores, which is a growth on a bio o y basis of 8.56%. The EBITDA to sales ratio remains at a very healthy 34.08%. The PAT and PBT for the quarter is pegged at INR55.41 crores and INR70.46 crores, respectively. On an annualized basis, the turnover growth is 2.7%, whereas the EBITDA has dropped by to INR34 bps. The stabilization issues related to GST are still a cause for concern. Lastly, budgetary support announced by the Government of India for excise fee zones have been claimed as refunds. Unfortunately, the refunds have yet not been accorded sanction by the relevant authorities. Due to the implementation of GST this year, the growth figures on a Y o Y basis are misleading. To put into perspective, even though the growth in turnover as per the P and L is at 5.01%, this is not a like to like comparison. The primary reason for this is that the sales value last year, it is netted after a 14% VAT impact. However, this year, the VAT impact is because of a GST of 18%. If the turnover was to be compared on a like to like basis, the growth in this quarter is at 10.12%. All the domestic sales verticals, which are general trade, modern trade and CST, have shown a growth in the fourth quarter. The volume growth of the total hair oil segment is still flat as against the volume growth of 3.6% in the third quarter, the offtake volumes in the fourth quarter have grown by 4%. However, for the light air oil, the growth in volumes have picked up. This has led to this has been led by a smart increase in rural volume growth. The rural volume growth of light air oil has come from 0.7% in the third quarter to 5.3% in the fourth quarter. This has led to a volume growth of 5.2% for the complete light air oil segment. And against these segmental growth, Baghat Amand routes have grown by 7.3% by volume, and thereby, you will see a gain in market share within the Lifehairoil as well as the total Rail Oil segment. The improvement in volume growth of Lifehairoil and even better gains by our lead brand, Bajaj almond crop sales, has resulted in an all time high volume market share of 60.1% in the month of March. The value market share has risen to 62.7% for the same month. This, coupled with improvements in rural volumes, points towards the turnaround in growth of Light Aeros segment. Domestic sales are showing continued signs of recovery across all segments. The General Trade business is showing up 11.07 growth in business in a GST neutral scenario. Model Trade has added a very good quarter four of this year and is showing a 24% growth in volume. CSP business is also showing a turnaround and has shown a growth of 5.6% this quarter. The sales in the ID segment or the International Business segment is still a cause of concern. Though collective actions have been taken, turnaround is at least a quarter away. Our initiatives in improving our direct distribution has resulted in reduction in the dependency on wholesale. What is encouraging is that along the decrease in direct leads, the total distribution for Badaj Raman's Club has risen to 3,900,000 retail outlets. This is, again, a clear sign that with the increase in rural growth, the future of the Life Heroes segment will be better in the coming quarters. The innovation center has already started delivering products that are being launched successfully. After the launch of the Bazad Grammy Amla Ayurvedic case sale in quarter three of this financial year, We have now launched Bajat Coco Jasmine in the month of Feb 'eighteen. In the fourth quarter, Bajat Zami Amla, this being the first full quarter after launch, has shown a 39% volume growth vis a vis its earlier half past. Our second launch, Coco Jasmine, has been accepted by consumers in Maharashtra and is bound to show significant uptake and market share in the common quarter. The big strain in the fourth quarter was the increasing price of crude. This has caused the strain in cost of our plate as well as raw and packaging material. The largest increase in cost is for live liquid balance sheet As against the price of INR 48.22 per kg in the fourth quarter of last financial year, the price this quarter is at 65.45 per kg. Even sequentially, at again INR 61.22 per kg in the first quarter, this quarter, LLP has shown a 7% increase in its price. Even after accounting for import tax credit, the equity price is still at INR56.38 per kg, which is still an increase of 17% on a year to year basis. The refined mustard oil during this quarter is largely flat. After accounting for the input tax credit, the price of refined mustard oil this quarter is at 81.44 as against 81.68 per Kt last year. Nova's focus project is now extended beyond EOP. The new deals are in place, and we should see visible results very shortly. During the financial year 'seventeen, 'eighteen, MoMA's screen has shown a 50% growth in ton turnover nationally. In the pilot state, the growth in volumes is 43%. Even on an annualized basis, the whole brand has achieved a turnover of INR 24 crores, which is more or less equal to the turnover we achieved last year. The positives that have been witnessed during the fourth quarter are mainly: one, growth in volumes of light rail industry second, growth led by improvement in total volumes three, continued leadership position of our lead brand, Prada Jam and Drop four, improvement in volume and value market sales with a healthy EBITDA of 34% despite strain on R and P and prices and lastly, a marked improvement in distribution despite reduction in dependency of Wholesale segment. We are now open for questions. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may please press star then 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star then one on your telephone keypad. The first question is from the line of Agnesh Roy from Edelweiss. Sir, congrats on good volume growth. My first question is on the modern trade. Sir, I see Big Bazaar now offering everyday low price and Reliance Retail is also offering 6% off on most of its products. So how has been your growth in this quarter and in terms of margins? Because these players are offering a lot of discounts, does it impact your margins in Modern Trade? I said, Vish, we in this quarter, in Modern Trade, we grew by around 24%, right, which is higher than the growth recorded by the whole company. It means that Modern Trade as a segment within our company performance is now becoming bigger and bigger. In terms of these big days and all that, we actually since we are the leader in market share in terms of Air Oil, we have a much better negotiation capability there, and we make a sizable margin in modern trade also. So these kind of discounts or we normally don't ever update one plus one, but we do get freebies and discounts on big deals or $15.10 $26 annually and all that. But that doesn't really negatively impact our margins. I would be able to say that modern trade is slightly more profitable than general trade for us. And sir, to summarize your margins in modern trade versus, say, last quarter and even going ahead, there will not be any substantial difference. Right? No. Also, it's a it's still a fairly small part of my total business. It's currently a little over 7% now, coupled with the fact that we actually end up making more margins in the morning. So my second question was on the chemist distribution and, of course, on Nomax. So in Nomax, have been focusing on increasing the chemist distribution. Now in this budget, if you see government has removed this 15,000 cap in terms of that medicine spend. So now it's you don't need to show the proof, etcetera. So do you see structurally in the Kenish shop consumer buying behavior to shift? Because lot of consumers were buying from Kenish shop because they wanted to meet the target of 15,000, and now no such rule is there. So is is Chemish shop going to reduce in terms of percentage of sales to FMCG company and thereby your focus also should it reduce longer term, not from one quarter perspective? See, I haven't seen any change there, and I feel good to say that it will not move the needle significantly. Because if you look at FMCG contribution in FMCG of OTT or the MS driven sales is not very, very large that you'll see some major shift in growth volumes of FMCG companies. And also 15,000 for the household in a year is a very small amount. So it's not going to cause major disruption here. Okay, sir. That's all from my side. Thank you. Thank you, Abhish. Thank you. The next question is from the line of Ashi Anand from Telegro Capital. Please go ahead. Yes. Hi. Thank you for the opportunity. The first question I had was more at the macro level. I was just trying to understand, you know, if you go back five years, you were seeing a significant shift away from coconut hair oil towards light hair oils. Now that kind of shift, well, is good to see some relative growth in the current quarter. I'm just trying to understand, you know, what has happened back to five years back where Lighthear was rapidly cleaning sheds? And what are the key drivers of the shift? Is it like relative prices of coppra and other oils? Is it function of rural income and down trading versus up trading? Or if you could just give some color on this entire macro shift? I think it's a combination of everything you said. I think the biggest thing was that people were moving from coconut to value added, which continues even today. The only difference is the biggest gainer in value add five years ago was light air oil. Currently, the biggest gainer is palm oil because you would know that we have a very peculiar situation in which a value added air oil is actually cheaper than a commodity, which is coconut. And therefore, the inertia to move from a commodity to value add has become less. Coupled to the fact that the rural growth today became down over the last two or three years, first, because of bad monsoons and second because of the disruptions that happened along the way. So it's actually the gain that we used to get from Coconut reviews and somebody else present the value add started gaining. I believe that people prefer premiumization and the brand image we have developed for Bajaj almond drops will see a resurgence of this shift from coconut and the low cost value added steroids to the Lifehero and specifically Bajaj Amand Rock in the coming quarters. Okay. Excellent. The second question is really with relation to our overall strategy, with relation to new product introductions. It's good to see a product relaunched every quarter. Just wanted your thoughts on are the new products introductions primarily focused on adjacencies around hair oils? And secondly, given the fact that we have significant cash reserves, any thoughts on using that to go out and acquire something to enter, say, different categories altogether to be able to leverage our distribution? Yes, to both. The immediate launches would be in adjacencies of hair oil and maybe the skincare. The future launches could be in other categories. But immediately, it will be basically either hair oil or skincare. In terms of using the cash on acquisitions, that's always on the card. When will that happen? When will this happen? I'm not too sure at this point of time because until you really sign on the dotted lines, you really don't know whether that condition is going to happen or not. We are actively looking for brands that can be acquired. Okay. Thanks guys for the answers. Thank you. The next question is from the line of Manas Agarwal, an individual investor. My question was in line with what the previous question was actually. Just extending on those provisions in 2020 that you've spoken about in your previous conference as well, how do you see like your innovation center working on, as you said, products moving to the coming quarter. We look to launch or re rate one quarter each. Any other product lines that you started to evaluate, you're saying you're looking at brand that acquisition worthy. So do you see any movement outside of AirHealth? Because this diversification that you're currently doing, we see it as something within the health care segment itself. So what is the outlook on other segments altogether? Mahas, we are only looking at the brands we have launched. Since we probably know Halo is better than the other categories, the fastest off the block as we enable. As we move along, you will see us launching or restating other categories also. And we have a whole part of our innovation center working on unrelated categories. So you could possibly see something which is not a hair oil, not a skincare as we go along our innovation path. So it is not that we are only focusing on AIRoy. We have all the streams working day and night to come up with differentiated, innovative products that can be launched successfully. In terms of M and A, yes, we have been. Let me tell you the valuations still appear to be a little higher and therefore we are cautious. Because the higher the valuation, the more difficult it is to turn it around. But we are actively looking at M and As within India and outside. Okay. Just a follow-up question on the M and A side. I see that a lot of IPO proceeds are still in the form of liquid investment kept aside for acquisition. So do you foresee any big acquisitions? And is there any scope for external parties coming in to help you with those, or you're satisfied with the cash pool that you have in your debt position, please, comfortable? This is all very easy because until you have an acquisition, you don't know how you're going to fund it. So whether it be a small or large, you may think of taking external help. External help could be debt or external equity infusion or help from a PE or VC. This is so you see that I really can't even though I want to, I can't give you a definite answer to this question. No problem, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Sameer Gupta from IIFL. Please go ahead. Hi, sir. This is Fasi here. Sir, a few quarters back, we had launched the sort of variant of the Bajaj Almond hair oil into soaps saying that the equity of almond can work in soaps for skincare, etcetera. Could you give us an update on that launch? How successful or otherwise it has been? What kind of sort of is it nationwide? Is it statewide? Any sort of color you can give on how that launch is progressing and whether it's met your expectations or not? Sarti, I think it worked it all along. We never launched a bunch of Bajaj almond drops, so it took B2B along with Bajaj almond drops. And we are looking at whether that would be accepted by consumers. It was more a kind of a consumer offer with Bazaar almond drops and not a launch. We did not launch it specifically anywhere in India or outside. So I don't think it's a question of meeting expectations or not. Yes, the results from consumer tests have been interesting, but we still need a differentiation, and that's what we are really working on because it's not a slow, doesn't make any sense that the bees around and their ability to sort of monitor and get cost efficiencies. We as a small soap manufacturer will never be able to make a significant dent. So therefore, we are still looking at differentiation, and we would act in the meantime, keep using it as more of a consumer offer or a trial pack along with our aeroids rather than a launch in individual capacity. So, sir, isn't the almond benefit a differentiation? Because I don't know if there are too many mainstream soaps offering almond as such. Every company has almond soap. Almond is a soap that's not innovative. It's a age old thing. And if you look at the soaps available starting from Goodrich number one and two, lots lots, all of them have almonds in it. Almonds in soap is not so innovative. I think Amandel was innovative when we launched it. I don't think it's innovative any longer. And it's just the first mover and the ability to build out strong brand that is helping us take forward. It's not innovative. You have everybody from each of our competitors trying out almond aerosols. So almond is not the same, man. It's as you would know that soaps are a difficult category to be able to sort of make different cases. Understood, understood, sir. Second question, sir, on Nomax. I understand you are focusing more on the cream segment, and I think the creams have grown at 40% plus. So just a clarification, sir, this 40% plus figure, does it include sales outside India? And if yes, could you give us the number for the growth within India? This is the company wide sales. And unfortunately, because of the way the IB is doing, if you look at sales within India, it's higher than 40% then. This As we have shown that ID has actually dropped this year. And MoMA within ID has also dropped significantly. So actually, growths are much higher than the case of NOMA. See. And currently, approximately, what would be the percentage split between the different formats of NOMA, that is cream, face wash or whatever else you have soaps? Currently, 60% comes out of free. Sorry, six years. Now 88% comes out of free, and the remaining 22% comes out of the various other segments. We are not focusing on face wash, which is a large segment, but last year, it was at around 16%. It's now dropped to half in terms of its saliency within the no marks related. Right. And sir, last question on the hair oils segment. You mentioned that there is a sort of rural uptick that you are witnessing this quarter. So I mean, much of that journey of recovery of rural have we completed? Is it like one third of the journey completed? Or is rural sort of really come back? And is rural growth currently ahead of urban or that is yet to happen? In terms of how much is the journey, I really don't have an answer because there is no benchmark on how I can monitor what is going to be the final growth in rural in the coming years. That is not a question I can answer in terms of Okay. It's being higher. At this moment, it's actually equal to the overall growth this quarter, fourth quarter. Right? And therefore, you will see improvement. And especially for our main brand, which is almond drops, it is actually still lower than the almond growth. For light and all, it's more or less the same. So, yes, it just started, and the the commentary I made was that if you look at the way rural started growing around seven, eight years ago, this is the part that it actually took at that point of time. So I'm quite hopeful that in the coming quarters, you will see a double digit growth in the rural, and it would start overtaking the one growth. Because, logically, there are more people. If the government invests in in the rural areas, they will have more disposable income and so on and so forth. So historically, say, three years back, rural was running at what multiple of urban? Four four years. Three years, the problem has already started. Four years Okay. Four years. Difference was around 10% in the growth of urban with rural versus urban. That is 10 percentage points, you mean? Yes. Wow. Okay. That's all from me, sir. Thanks. Thank you. The next question is from the line of Raghav Behani from Dalal Street Bulls. Please go ahead. Good morning, sir. My question is with the, you know, revenue contribution of different products in the company's overall revenues, like, but the other our ADHO segment is contributing, I guess, the maximum as of now, maybe around eighty five, ninety percent. So going by the growth in, you know, the AMLA segment and the Jasmine segment, do you expect that the other segments will contribute a significant portion over the next two to three years? Do you see any kind of that kind of scenario playing out? The whole objective of this is reducing the dependence of Aman. Whether it will happen in the next two or three years, I'm not very, very sure. But I think, collectively, the new brand launches will reduce the dependency on Bazaar's Ahmad's law. Okay. Sir, could you just give me the exact percentage figures of contribution if it's available? It's there in the investor presentation. If you go to slide number 30, you'll see that the we have given the volume and of each thing, and this is something that we have been tracking over the last many years. Okay, sir. Sir, one more quick question is that you've mentioned about hedging through contracts on the MCX and NCDX. Is it something a new hedging technique that we are trying out for the crude oil prices or something? No. No. No. This is something we started around two years ago for mustard oil. Because in mustard oil, we can actually help mustard feed, and it will move in proportion to the oil. So if you had hedged it properly and oil went up and therefore there was a negative impact on gross margins, you would make a positive impact on the hedging volume that you have done for seeds. Crude is a very difficult thing. We have been trying in small quantities, but hedging crude is not only dangerous, but also the exposure is very, very high. And we are basically an FMCG company, and therefore, we don't want to get into large scale hedging of crude. It be very, very dangerous for a company like us. Okay. That's it from my side, sir. Thank you. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Sir, the first question pertains to the comment that you have made in your PPT that volume market share of almond drop heroin has actually increased in overall THO market, but the value market share is has not picked up. Now if I add this with your opening remarks that somehow the premiumization trend this time has not the the trend has not been beneficiary of conversion from CHO, and it has been picked up by low end heroes like ARM Heroes. So somewhere, we are gaining volume market share, but not value market share. So just wanted to understand the the disconnect between the two. Feasures, since we've been falling into the hair oil industry, the biggest differentiator this year is the rise in prices of coconut oil, right? And coconut oil still is around 35%, 36% of the total kale oil in the market in India today. And therefore, disproportionate rise in prices of coconut has actually reduced our value market share, whereas the volume is Coconut has not grown that much in volume as in value. And that's the difference between volume and value market share that you see. In fact, some five or six years ago, coconut used to be half of our price. That ratio has actually dropped over this year significantly. Sure. So, sir, keeping that benchmark consistent, do you think that this year you will take a price hike in the key brand? We've actually taken a price hike in Bazaar Diamond Drop in April itself. And what we have done is we've actually increased the price of the larger SKUs. And in the lower SKUs, we have gone back to our original volume. You will remember that we moved from 52 to 53 ml in the same bottle and 100 to 105 ml post implementation of GST. They've actually reversed that and gone back to 50 and a 100. Whereas in the higher prices, they've actually increased the MRT. So, sir, what would be the weighted average price? Right? It's very different because we can't wait at volumes. But if you look at the the larger sizes, we have taken a five or 6% price hike. Sure. So second question pertains to international business. I believe that the business had a relatively low base, and to see this kind of deceleration is slightly surprising. So just wanted to know if you can share some color on that. Actually, because we had a low base, the situation is much faster. All you need to do is one distributor stops buying from you, and you'll see a drop. It's when you have a larger base, your list starts spread over a larger number of areas and consumers. And that's one of the reasons that you see one major. The biggest hit has actually happened in the MENA region where we are growing the fastest. So places like UAE, KSA, The Gulf Area, we are actually growing quite well up till two years ago. Last year, we had first got into problems with the distributor, then with our own infrastructure in place, and that's what we need to get back into place there. Sure. And sir, lastly, on booking one booking question. Other income witnessed quite a volatile run rate this year on a Q o Q basis. So if you can guide us on what's one should consider for FY 'nineteen? It is, as you will know, under the India, you have to account for mark to mark losses on the treasury. So actually, the cost for deceleration is basically a very large mark to market loss that we have had to put on our books. Not only did interest rates not go up, bond rates also didn't go up. In addition, therefore, we had to book what was the mark to market loss that we booked? INR 3 crore in addition to the opening loss of 5 crore. So we already had opening mark to market loss of INR 5 crore. We have booked another INR 3 crore loss in that. So this is actually not an actual loss. So it it does not appear on your books as such, but because of the new accounting standard, you have to account for it then. Good, sir. Good, sir. A lot, sir, and all the best. Thank you. The next question is from the line of Jinal Chet from MultiAct. Please go ahead. Hi, Sumanji. Couple of questions. Firstly, taking the point about Tejas where you mentioned the coconut prices, what and since you also mentioned that in this time around, Amla, it has where there is we've seen some downgrading. So the price differential between Amla and premium hair oils was too high. So obviously and then we've taken a price hike now. Anything that we could see there? Any thoughts on that, that if that could we could negatively impact us? Any thoughts? You should remember two things, that over the last three years, the construct of the AMLA market itself has changed. So the leader used to be the highest priced AMLA, which is basically brands like Carver online and all that. Over the last three years, the leadership has actually been taken by a low cost Amla category, which is formed. And therefore, in terms of volume, that low cost Amla is now bigger than the Ravaramla volume. So there has been a reconstruct of the whole thing. Now the reason why the low cost Ramadanamla sales is basically because of the price, right? And whereas you buy more than the premium category where you are by far the leader and you're very large brand. Keeping that in mind, we were very cautious when we took the price hike, and we did not take a price hike across all the SKUs. It took it only in the larger SKUs, assuming that the value of SKU, Bajaj Amundrok, which is one of the highest priced products, would not be so price sensitive. But yes, this is something everybody needs to be looking around carefully because as brands other than the low cost keep on increasing their prices, for example, Coconut keeps on increasing prices and the low cost formula continues to be at the lower price, this conversion could affect other brands also. Understood. Secondly, what's the update on how are we seeing things on the wholesale trade channel? What will that count on that? Consciously, we are not pushing wholesale because it actually has helped us to bring it down from a 55% dependency to 35%, 34%, 35%. This is good because if your focus is going to be innovation, the larger the dependency on wholesale and lesser the direct distribution will happen even when you launch new brands, right? So on the larger side of it, I think in hindsight, demonetization and GST has actually helped us speed up the innovation processes. But just to that point, so basically, what you're saying is, suppose that the rural growth picks up, we might not be able to take full advantage because now we don't want to have too much dependence on wholesale. Could that be Yes. If you look at it, unilaterally, yes. But what we have also gone and done is increase the number of distributors we have in the rural areas. It currently more than doubled the number of distributors in the rural area. So yes, if we had not done that, we could have been negatively impacted, but we both saw that and took corrective action at the time of demon itself, not now. And most of this is now getting seen as increase in rural volumes, in our case, than the lighter oil packing deal, sir. Thank you so much, Sumaji. Good luck to you and the company. Thank you. The next question is from the line of Ajay Thakur from Alder Capital. Please go ahead. Hello, sir. Thanks for taking my question. I had just one question regarding the growth rate in the AMLA segment. How has it been trending? If you can just throw some light on that front, at least for the last one or two quarters? See, not one or two quarters. If you're looking at the omelet category itself, that's actually trending faster than the Litecoin. Like I said in the previous question also, the the this is the first time you really see a value added hair oil being priced lower than a commodity. So it's going basically because a lot of conversion from coconut from unbranded is moving it directly into value added. Normally, happens is the unbranded guy moves to coconut, who moves to a low cost value add, then it moves to a premium. But here, it's jumping the gun and going directly to the value added heroic category in which the biggest beneficiary is actually the low cost formula. Okay. Okay. Thank you, sir. Thank you. The next question is from the line of Aditya Shed from Investec Capital. Please go ahead. Hi, sir. Thank you for taking my question. Sir, what is the volume growth in the category this quarter? Which category? Skincare category. I didn't get you. Skincare category. Skincare. The category growth, it could be around 21, 22% Antimax. Anti mask. Actually, skin care, we don't follow. We follow anti mask because skin care is a huge category with the things like moisturizers and painter screens and all that. We don't track that. We track anti mask, and we're now focusing on anti mask women productivity. That would be something in the mid twenties. So so anti masks for you was around 21% growth year on year. Yeah. Does that is that correct? Yeah. Okay. So so when I see the presentation, sir, if I see the cases sold, year on year, it has come down from 24,000 to 20,000. So what is the discrepancy in that? There's no disc discrepancy. What you're seeing is no mask as a whole. No mask has a soap, has a face wash, has a face mask, has a face pack, and also face clean. So if you look at face clean, face clean has grown at 30%, right? Whereas in value terms, right? In volume terms also, it's grown at a fast pace. Whereas the figures that you are quoting as everything, this is not only skincare or anti mask, it's got everything in it. Okay. Understood. And my second question is, sir, on on, again, the category cases sold. So on the others, what are the products that come under others where the cases sold have doubled this quarter? You have things like black tooth powder and low cost formula, Yeah. Vaccine, hair oil, all those things, which are non focused products, which are waiting for some spark in terms of differentiation, and then only will be invest in these. These are actually noninvesting. Okay. And any any particular reason for them to grow grow in this quarter? Recently, we've launched Focal One Craftsman. This is the part of this. Okay. So this comes under this. Okay. Alright. Okay. Thank you very much, sir. Thanks. Thank you. The next question is from the line of a follow-up question from the line of Ashi Anand from Allegro Capital. Please go ahead. Yes. Hi. Just a quick question on outlook on margins. So we have different kind of things checking through, rising input prices, but we've also taken price increases. And you mentioned value engineering initiatives over the presentation. I just wanted some kind of a sense on how you see margins pan out in FY 'nineteen. See, our aim is to keep margins constant. But at this point of time, we have taken care of that. But if the prices keep on rising and we choose not to increase prices of our finished products immediately. So you might see a marginal contraction in margin, but I think we should be able to manage that aspect. We believe that if bromine prices remain where they currently are, we should be able to maintain margins based on what we've done so far. We've shown that's a proven track record. Okay. Excellent. Thanks a lot. Thank you. The next question is from the line of Amit Sena from Macquarie. Please go ahead. Yeah. Thanks for the opportunity, sir. Sir, quickly, one clarification on the the the SQ where you have taken the price hikes are more than 100 ml. Right? Yes. So and is it fair to assume that in terms of volume, they'll be around onethree of our total volume or somewhere around that? No. The smaller will be larger in terms of volume. So just to give you an idea, SaaS sales are 18%, 50 ml will be around 20% or so, odd percent, 100 ml is the largest at 26%, 27%. Okay. So that adds up to somewhere around somewhere around 65%. So still 35% is more than 100 ml. So yes, you're right. If you see our annual reports, we do get breakup of sizes. That's the faster sales getting dependency. And even in the smaller SKUs, we have not taken a price hike, but we have, you know, done a volume correction, which will actually actually add to our bottom line. Okay. So that will basically, in terms of effective price hikes, I understand it will be difficult to to get you a number, but it will it will be around 4% in in that vicinity. Yeah. It would be fair to estimate that number. Oh, okay. And secondly, sir, on your Brahmi Amla, Ayurvedic oil, and clearly, the offtakes have been have been very good, Which are the states which are doing well for you? Actually, we first launched it in only four states, and then we extended it. So I think the Hindi speaking areas are doing well because we're like I said that we are looking for differentiated products, which are going to be supported by marketing, right? And therefore, the advertisement at this point in time is on in the English speaking areas, which logically will result in faster growth in the Indian speaking area. Okay. So it is this quarter growth is also on account of expanding your distribution for that product? That's the only way you grow. You can't have only advertising and offtakes without distribution. It's actually we have that thread on the in in the sub presentation in which they've shown you the increase in uptake and Yes, yes, it is there. Yes, yes. But I thought that within a particular state also, there might be some improvement. On last question is on your overall plan for launching one product every quarter broadly. So we are sticking to that plan, right, Yes. You don't think so far because these are strategies that are thought of over a longer period of time, and therefore, you don't go back on your strategy over two quarters. Yes. I I can at least see one every quarter for the next two or three quarters. Okay, sir. Thanks a lot. Thanks a lot for your time. Thank you. Thank you. Next question is from the line of Tejesh Shah from Spark Capital. Please go ahead. Hi, sir. Couple of follow ups. Sir, for the reasons that you have explained in past calls, our employee cost witnessed sharp inflation in the last two, three years. And for last two, three quarters, the run rate has stabilized at around 19 crore per quarter. So should we look forward to normal rate of inflation in this cost line item here on? No. You won't because the jumps that is actually seen in other expenses. You are talking about other expenses. Right? No, sir. Employee cost, sir. Employee cost. I think more more or less that's true. So now you'll see that inflation cost creeping in in terms of increase in employee cost. So that nonlinearity that we witnessed in the last two, three years is behind us now on that? As I see it now. Okay. Sure. Sir, second, just just for a fragment reason, you launched Coco Jasmine in Maharashtra. Whereas in fact, in the previous question, while answering that, you mentioned that some of the offerings that we are launching now intuitively has much more ready market in the hotlines. So just wanted to understand why Coco Jasmine has been launched in Maharashtra, whereas other launches have been Ramyamna has been relaunched and focusing on in the hotlines area. See, there are two parts of it, Ketan. Logically, you can't launch all the products in one area. You have to launch a product, let it stabilize, then launch another product. Right? If you are to look at markets differently, you will have a different offering in each of the markets. So rather than offering products only in market, it makes a lot of sense to let one product stabilize and then offer another in that market and quantitatively look at other markets. For example, today, we've launched into that, which is not ours. So tomorrow, you will see another lot in the East because we haven't launched anything in the East, and therefore, the team is sort of ready to take up extra initiatives on a new product there. So I don't see there's a disconnect there. Don't keep on launching a new team or a brand because you believe you are strong enough there, and therefore, you can keep on adding product. You add products and then let the team take it up and then go forward. In Jasmin, the biggest area is Maharashtra for the coconut Jasmin offering. So it's better to go into the largest area and price it out there. Sure, sir. Thanks, sir. That's it from my side. Thank you. The next question is from the line of Ankit Bawil from Shivcom Ventures. Please go ahead. Yeah. Good morning, sir. Sir, my first question is now considering the fact that most of the demand related headwinds are now behind us and there is an expectations of normal monsoon. So sir, this year, can we expect at least a double digit volume growth in ADH, We do not give guidance, and what you're actually seeing is only the green shoots. So maybe it's a little too premature on looking at a major jump in growth. My point was that I think the the worst is behind us. How fast we'll be able to attack the best we ever had is something I I don't think we have the visibility at this point of time. Okay. And, sir, secondly, what could be the contribution of new launches in the overall growth for the company maybe in this year? It's 2%, 3%, 5%. It's very, very small. This year is not going to be turnaround here. Okay. Okay. Thank you, sir. Thank you. The next question is from the line of Avnish Roy from Edelweiss. Please go ahead. Sir, just one small follow-up. Sir, in spite of such a sharp inflation in raw material, your gross margins have been protected really well. That's good. Just want to understand that bit on value engineering. What exactly have you done? And has competition also done similar things? I think value engineering is the second biggest cost for being able to maintain. The first is basically buying the LLC properly, and like I've been indicating in all my conference calls that they actually got a decent strategy on when to buy and how much to stock. So a lot of this has happened because we actually stopped off at the time when crude was rising. In terms of value and engineering, not many people can do it because the biggest value engineering that we have done is on our glass bottles. If the new technology is available, you can actually have lighter bottles and therefore cheaper bottles that can be made with equal or better strength in terms of transportation. So this is what we have been working on for the last three years. And this year saw that benefit coming to our margin profile. And sir, what is the stock that you have of the rear lower raw material? Or is it largely over because you have taken the price hike? Oh, it's large deal. But even we still have a lower cost than what is currently available. To give you an idea, the current price would be close to around $74.75 rupees a kg. It still has stopped at around 70 odd rupees per kg. And for 74, is the price taken? Or Yeah. Yeah. And, sir, secondly, follow-up on that. In some of the places, for example, Mumbai plastic ban has happened. Does it impact your LEDs, for example? It it doesn't seem accepted. If if you've been following the trend, it's been reversed by the government of Maharashtra itself, and the discussion is happening on how to do it, especially for non food items that we fall under. So you don't expect any big impact in Mumbai, for example? The last thirty years, I've seen this happen, right, so at the cost of sounding negative, I don't think it will happen in the early. And, sir, lastly, eBay bill, when it happens within a state, then do you expect some disruption? I understand in April, not much of disruption. But in the second phase, you expect some disruption? No. I don't. I think that in our kind of a thing, we were very well prepared, and we were able to put it into our ERP system. So, actually, the April thing went seamlessly, and we really didn't have any kind of disruption. Even today, we are prepared for within the state, and we have armed all the and CNS agents in such a way that they will be able to move into this as and when it's imposed. Sir, how do you see media inflation? I understand a lot of new products, but from a media inflation perspective, is it likely a big concern, FY 'nineteen? Oh, yes. See, if you look at it, normally, has been fairly stagnant. This year, we expect it to go up by around five watts percent, which can be absorbed in our overall price increase that we have done. Okay, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Tanmay Sharma from Jefferies. Please go ahead. Hi, sir. I have only one question on margin. You said you will be able to maintain the margins of the current levels of accrued and your royalty remains. Sir, my question is, why don't you think we should be able to forego some of the margins currently considering that we are at close to all time high margins and considering the heroic category, will instead of taking a price like we could have been more aggressive and we have benefited from the fact that commoditized oil is increasing and take more share from there instead of focusing more margins and rather forgoing some margins for that. This is the only question I have. Yes, sir. I think, clearly, you're right. But when you forgo margins, you also risk yourself open for competition coming in and overspending you. And therefore, even though we have taken a price hike, like I said, it's been only on a few SKUs and not across the board. And therefore, even though we would actually have to take a 6%, 7% price hike across the board, we didn't do it. And we have taken that into consideration. In fact, in one of the previous calls, I said that we would like to maintain margin, but not at the extent of volume. And this is the philosophy that we have actually followed here. Okay. Sir, but because as you said, media inflation is also going to be only four, five percent. So so where will you of 18%. Not 18%. 9%. It is approximately the percentage of advertising to sales that you have. So it's going to be 5% or 5%. This is less than half a percentage. Okay. Okay, sir. That's it from my side. Thank you. Thank you. We take the next question from the line of Amit Kumar from Investec Capital. Please go ahead. Yeah. Thank you so much for the opportunity, sir. Just a quick follow-up on my side. You sort of mentioned that, you know, Jasmine product, Maharashtra is, you know, by far the largest sort of state for Jasmine hair oil. If you can just highlight, you know, two, three other states which are, you know, big on this form form of hair oil essentially. And the second one was, you know, the cocoa Jasmine product that you have launched, And how should we sort of look at differentiation versus, you know, the current products? So Parish would have a Jasmine offering. The Dabur through Vatica, they have a Jasmine, you know, offering. How should we sort of look at differentiation, you know, in this particular product versus what is not already available in the market? See, if you read the presentation, we have put our stance right up front and saying that the differentiation we are offering is reduction in breakage, and this is being clinically tested. There is not a claim that is sort of drawn out of the hat. And that differentiation, we believe, is strong enough to get a change from the current payroll users. Because today, hair fall and frigid hair and all these things are becoming much and more much more of a top of mind for consumers, especially very thin. Right? So, yes, we have been very careful in what we are saying, what we are advertising. It's been backed by planes, which are backed by clinical trials, and that's what we are looking at. In terms of markets, Maharashtra is the biggest, followed by Westminor and followed by Andhra. Actually, intuitively, you would think that since it's Kokala, it would be very big in the South, but that's really not the case, sir. Okay. Okay. Understood. Thank you. That's it from my end. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you. Thanks a lot again for logging in, and it's always very encouraging that we have such a lot of participation in our investor calls. And even outside the investor calls, if you have any questions, you can send an e mail to our Investor Relations department headed by Fischer. Thanks again, and meet you after the next quarterly results. Thank you very much, sir. Ladies and gentlemen, on behalf of Kotak Securities, that concludes this conference.