Ladies and gentlemen, good day and welcome to the Bajaj Consumer Care Q3 FY 2026 earnings conference call, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashutosh Joytiraditya from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you, Sagar. Hello, and good evening, everyone present on the call. I, on behalf of ICICI Securities, welcome you on Bajaj Consumer Care's Q3 FY 2026 earnings call. I would like to thank the management for giving this opportunity of hosting the call. We have with us Mr. Naveen Pandey, Managing Director, Mr. Dilip Kumar Maloo, CFO, and Mr. Aakash Gupta, Head of Finance. I now hand the call over to Naveen for his opening remarks. Thank you.
Thank you, Ashutosh. Good afternoon, everyone. As we are aware, at Bajaj Consumer Care, we operate primarily most of our business in the coconut oil and hair oil category, and that's close to a $2 billion revenue side. Multiple times, people have asked this question as to how this category has been performing, and I would like to mention, as mentioned in the second slide, that this category has been growing over the past three years with a volume CAGR of close to 4.5% and a revenue CAGR of around 8.2%. And this period was a tough period for the category. As you would see, the macroeconomic headwinds have turned into tailwinds, and we are seeing good economic growth along with inflation at one of the historic lows. And this provides great tailwind and environment for the category and for our business as well.
With that, I would welcome you for the call for the quarter. This quarter registered a strong growth for us across all segments, demonstrating early results of the action initiated by us towards improving our revenue growth and margin. When viewed sequentially, you will see the significant journey we've been able to cover over the past few months. On a standalone basis, the revenue of the company stood at INR 287 crores, registering a growth of 27% on a YOY basis. On a consolidated basis, the revenue stood at INR 306 crores with a growth of 32.7%. The gross margin on a standalone basis stood at 59.8% for the quarter, registering a significant improvement of 800 basis points on a YOY basis. The improvement in gross margin, as previously shared, has come on the back of a mix of actions around strategic pricing, revenue management, and mixed improvement.
Consequently, EBITDA on a standalone basis for Q3 grew by 99% to deliver an absolute EBITDA of INR 58.4 crores, which translated into an EBITDA margin of 20.4%. This is an improvement of 740 basis points over the same period last year and in line with our last quarter. On a consolidated basis, our EBITDA grew by 109%, translating into a margin of 18.6%, which was again a 600 basis point improvement over last year. The standalone factor stood at INR 7.6 crores with a margin of 16.6%, and the consolidated factor was INR 8.4 crores with a margin of 15.1%. The quarter also saw strong recovery in our general trade channel, which grew in line with the company.
This performance came on the back of volume-led growth both in urban and rural segments. Both the key sub-channels in urban, namely direct retail and wholesale, have done well for us in this period. As you're aware, the rural business, where we were making significant changes in our coverage model, had been muted in the first half of the year. However, as we've entered quarter three, we have seen a strong revival in this channel. Having said that, this channel is relatively weaker as compared to our urban growth, and we are working on to ensure that it gets rural to its full potential. Organized trade continues to perform well by registering a strong double-digit growth year-on-year in quarter three. Within the organized trade, modern trade and e-commerce have performed well, whereas CSD and CPC channels were a bit muted.
On international business, this quarter has continued to be challenged, and this overall business of international has been weak over the last couple of quarters. This quarter, we declined mid-single digit on a YOY basis. Within that, the markets I would want to mention which performed better were Nepal, where we saw a revival in growth after geopolitical issues impacting revenue in the last quarter, and in Bangladesh, where we have taken a model correction, saw us sequentially grow over Q2 and also achieve operational break-even. Moving ahead, at a brand level, I'm very, very happy to share with you that Almond Drops Hair Oil has delivered a very, very strong value growth on the back of double-digit volume growth. We saw strong performance across pack groups. Our A&SP spends of the quarter were up nearly 37% as against the same period last year.
What this meant was that we ensured that ADHO continues to operate on a very, very strong SOV/SOM ratio. Our aggression and digital spends ensured that we reach the digital and the new age audience across all significant platforms at a very high frequency. On the front of coconut oil, Bajaj Coconut Oil witnessed a growth of mid-single digits in quarter three. Over the past two quarters, we have taken a correction in our pricing and discount index against the market leader and have brought it to a level which is sustainable. While this correction has led to a temporary volume-led impact for us, it has helped us achieve sustainable margins. We also believe that most of this impact is now settled and behind us, and we should see revenues built up over time.
Bajaj Gold Enriched Coconut Hair Oil, which was launched by us previous quarter, saw a very good response both from trade as well as consumers. Banjara's, which was a brand acquired by us under Vishal Personal Care, also registered a very strong 15% year-on-year growth for this quarter. Operating margins of this business also remained stable in mid-teens. Our integration plans are in line with internal timelines, and we have already integrated two states within south where we witnessed a very strong positive response to the integrated portfolio of Banjara's and Bajaj Personal Care being carried into the market. The integration for the rest of the southern states has already been initiated and would be complete over the next quarter. On the front of input prices, we have seen LLP moving upwards over the last couple of quarters. As against previous quarter, this quarter, the prices were up by 2%.
However, in case of refined mustard, we saw a sequential easing of inflation with prices declining by around 5% as against previous quarter. On copra, we have seen significant softening of prices as against quarter two, and we expect that in the coming months, copra should ease a bit further. The rest of the basket, except for copra, is likely to remain range-bound. Thank you for your attention. Back to Sagar for the question.
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and then one. Participants, you may press star and then one to ask a question. Our first question comes from the line of Abneesh Roy from Nuvama. Please go ahead.
Yeah, thanks, and congrats on an extremely good set of numbers. So, Naveen, two quarters. Previous quarter, you delivered 10-quarter high revenue growth, and this time, even more explosive. So, the second question is, what is the sustainable growth rate given Q3? There was a GST transition impact. Some companies sort of pent up kind of a pipeline ceiling in Q3 also. So, is that helping? So, would you expect a slower growth rate, say, in Q4 and Q1? That is my first question. And second, margins. Last two quarters, 18% very sticky kind of margins, EBITDA margins. Where do you see the journey towards higher margins? That's the first question.
Abneesh, thank you. First of all, regarding your question regarding pent-up demand from quarter two or the price, see, we had, even in quarter two, we had said that on quarter two base, we had possibly estimated an impact of around 2%-3% of growth, which would mean on those numbers, anywhere between around INR 5 crore-INR 7 crore kind of a number would have happened. Now, if you carry it forward and look at it on quarter three numbers or going forward, it is not a material impact, and I don't think so we should be too worried about it.
Having said that, obviously, when you are in the high growth trajectory, you can't really predict to the decimal point, but yes, we are working towards, and all our actions are designed to sustain a higher level of growth than what we witnessed in the past, and that is what our endeavor would be. Moving on to margin question, I think, as we had shared earlier, a couple of quarters back, there have been a lot of actions which have been taken, not just in the last three, four months, but over a period of the last seven, eight months, nine months, which have kind of culminated into a set of margin improving in, and there is a certain amount of improvement which has happened because of actions which I would say are low-hanging fruits or which are quicker delivery on margins, and we have seen that.
We will see further improvement on margins gradually and slowly. Our aspirations on margin profile is higher, but the next set of movement will come in gradually rather than more meteoric.
So, Naveen, one follow-up on the demand side. So, we are seeing the other, obviously, the big daddy of hair oil. Marico reported really strong VAHO numbers last few quarters. Even Dabur is doing reasonably well, and now you are also doing well. So, is this an industry-wide large company revival in hair oil, or is it every company has its own reason? And second is, your base was very soft last year. So, general trade was extremely challenging last year.
So, my question is, in terms of strategic changes which you want to do or have done, given the last five years for the company was very difficult, and you had a lot of new ideas given the Marico kind of background, if you could tell us from a strategic input change, what all has happened, which are the ones you are happy with, which are the ones you are not that happy? That is my next question.
I think, Abneesh, I will start by saying that we have a fantastic team here at Bajaj, so it's not Marico idea being copy-pasted here. I think we are doing our own job, and I'm extremely proud of what the team has been doing. But in terms of category, yes, there is a certain amount of buoyancy in the category which we see, and that would translate into most of the brands which can get their act right, benefiting from the same. So, yes, there is a better consumption momentum which seems to be there in the environment, and that is coming into play. With regards to us, see, we've been very focused. I think we've been focused on our core brand, ADHO.
We've invested back a lot of margins in terms of higher advertising, which you see us committed and focused on that, and I think that is something which is working for us, and we intend to continue our endeavors on that same and see that take it forward.
Sure. Last question. Copra, from the peak, how much has the correction been? And both you and Marico do expect more corrections. What will be your view on how the crop is? How much can be the correction? And related question is, you have been saying that you want to focus on the core, which is ADHO. Given overall company is doing well, ADHO is doing well, and Copra is correcting, would you like to also now focus a bit more on coconut versus your initial plan? Given there is a raw material cushion, there is an overall buoyancy in the market, any change in the plan for coconut where you want to be now a more rational player rather and focus more on the core of ADHO? So, any change there?
So, first of all, Abneesh, I think the market is expecting a sequential correction over this quarter and then the subsequent. Now, how much of it will come in this quarter, how much will come next quarter, I think is speculation. Possibly, I'm not best suited to answer that, but yes, the crop seems to be good, and we are going to expect a price correction. That is what is seeming to be most likely. What we have done is that we were operating at a certain indexation to the market leader by offering a certain higher benefit to the consumer and trade. We have got ourselves aligned to what we believe is sustainable, which will allow us to operate profitably in this category and invest behind our brand. I think we've, by and large, tweaked ourselves to get to that position.
With this, yes, we will have aspirations to do well, but our aspirations would be not by cutting prices and doing more, but would be to build in the right way and to gain a fair share in the market. So, yes, while we focus on ADHO, we will also focus on coconut, but it will not be a price-led route. It would be more a brand-led route which we will take to build the.
So, thanks. That's all from my side. Thanks a lot .
Thank you. Our next question comes from the line of Rehan Syed from [inaudible] Asset Managers. Please go ahead.
Yeah. Good evening, good evening, and thanks for being with us for today. Am I audible, right?
Yes, sir, you're audible.
Yeah. So, first of all, my first question is around. I want to understand regarding the productivity of your Aarohan trade. So, you have seen a 25%-40% increase in outlets covering the Aarohan trade given this massive expansion in physical trade. So, why is the non-ADHO portfolio only going at a very similar? Is that due to distribution infrastructure currently to focus on the flagship brands? And what is the specific timeline for this new order to start contributing in the rest of the hair care and Banjara portfolio?
Sorry to interrupt. Rehan sir, your audio was slightly muffled. If you're using a speakerphone, may we request you use the handset? And management, if you can, please confirm if you were able to hear the participant.
Yeah, I think I heard Rehan. Let me try and answer Rehan's question.
Sure.
Rehan, the first question is, the way we measure Aarohan is Aarohan is nothing but our attempt in terms of building a solid direct distribution system. We've been doing that both by looking at adding new outlets in urban as well as changing our go-to-market in rural and going more direct there. That exercise, we've seen in the states where we operate, we've already seen anywhere between 25%-40% addition of outlets in terms of those states. At an overall level, we've added more than 10% outlets to our direct reach. Coming to your question on why is it helping ADHO more than the other portfolio, I think that's the question on what we are focusing as a portfolio. It has not benefited as much on coconut because we've also taken a strategy of correction, and we've changed our market inputs behind that brand.
Over a period of time, direct distribution will help us not only benefit the sales of the top brand, but will also help build the overall portfolio range in an outlet. And that is something which would be a long-term benefit you will see accruing to us. I hope I've been able to answer your question.
Yeah, yeah. I know. So, sir, my second last question is around the international business that you're facing structural challenges. So, have you seen a recurring theme of unstable go-to-market issues, particularly in GCC and Africa, where revenues fell 6%? Given that the distributor transition in KSA is only now behind you, what structural challenges and changes are being made to ensure that these reasons don't continue to act as a drag on consolidated growth? So, are these issues purely operational, or are we facing a fundamental brand irrelevance in this specific geography?
I don't think so, the issue is brand relevance or brand. I think the issue is more partner choice, go-to-market, people on the ground, and those are some of the fundamental corrections. See, in a direct market like India, where you are operating with your own teams, it's far easier and far quicker to sometimes influence and make changes around this. In markets where you're working with country distributors, some of these changes have to be done more gradually, and you have to work with partners to get the changes done, so that's where it is going to take a bit more time, but we are confident of what we are doing, and we hope we will get there in the next subsequent couple of quarters.
Yeah. Thank you. Thanks for taking the time.
Thank you.
Thank you. Your next question comes from the line of Amit Purohit from Elara Capital. Please go ahead.
Yeah. Thank you for the opportunity, sir, and congrats. Just on the growth in the standalone business, I was trying to understand. Last quarter, we saw much of the growth was GT-led, and the volume was probably flat, which is not wrong around the ADHO, and this quarter, we are talking about a good double-digit growth. What would be the price increase we would have taken in ADHO from YTD? What would be the price growth from there?
So, overall, as you would remember, we talked about that last time, the difference was close to a double-digit kind of a number. And that is a result of not just price increase, but also price and mix change and revenue management activities, which we've done, which is the spread between what you will see as the revenue growth and the volume growth. So, we would not want to further bifurcate into how much comes from which activity because I think that'll be too sensitive.
Okay, but when I look at the other segments, like coconut or even for that matter, international business, I mean, you talked about double-digit, but would ADHO be like a high-teens kind of a growth rate for us to achieve this kind of a number, or would it be mid-teens? If you can just give that.
I'm sorry, it's not high teen for sure. But yeah, beyond that, this restriction.
Sure. And just from the margin side, I mean, this quarter itself, we've done pretty well. One on the growth side as well as, obviously, delivery and help us to improve our margin. But then the outlook, when you look at, say, beyond FY 2026, and how do you think this new strategy of GTM would probably, when do you think that this will get completed, maybe in full of FY 2027? It would be your first half of FY 2027. What is the timeline of this?
Your question is on Aarohan?
Yeah, yeah. Aarohan. Yeah. Yeah.
There would be some parts of the exercise which will get concluded. For example, we've concluded for a few states this year. We will pick up the balance states and do that in next step. But then some part of the exercise, like direct distribution expansion, is something which is ongoing. So, it's not that it will get over in a year, but we will keep on sequentially working and improving from where we are to the next level of maturity and next level of depth in the outlet. So, that will be an ongoing work.
Sure. Sure. And so, last part of this growth, with one, you indicated some consumer stake, and also because our focus on Aarohan and GTM operation, that is working well for us across channels, right? Is that what you?
Yes, that's fair to say. That's fair to say.
Okay. Thanks. Thank you.
Thank you. Our next question comes from the line of Naitik from NV Alpha Fund. Please go ahead.
Hi, sir. Thanks for taking my question. I'm from [inaudible] and I'm very good setup number. My first question is, if you could highlight what is the number of direct outlets that we have as of late?
We broadly do around 6 lakh outlets, basically urban plus rural, put together as a direct coverage.
Got it. And any ballpark number that we are looking at adding next year to this?
See, Naitik, our stated point of view has been that we want to expand around 10% coverage every year and do it year on year for the next four years to five years. I think that's what our committed strategy is. Now, obviously, it might not be spread equally across every year. We might do a bit more in one year and a bit less in next year.
Got it. Got it. And so, my second question is, apart from this program where we have increased our distribution and some buoyancy in the demand center, is there anything else or any action that you would like to highlight which will help us sort of keep this strong growth?
Sorry, I was not able to hear you. Can you please repeat?
So, from what I've understood, two key reasons for this growth is one, our approach on our own program, increasing the direct reach. Second is buoyancy in the consumer sentiment. So, apart from this, anything else that you would like to highlight which would contribute to growth?
See, our growth, which I've been there, if you're wanting to understand why we have grown, very simply, we focus on our brand. We put in effort behind distribution. We have invested behind the brand in terms of advertising, keeping the media spends up, and our overall strategy execution has helped us get there. I think that's the way I would state it.
Okay. Got it. And so, my last question is, if I have to understand, your organic growth would be set to 2020, 50% would be the organic growth that you have achieved? If I were to remove Vishal's number. Again, Vishal, so the base quarter would not have Vishal's perspective.
Standalone, basically, Vishal is not there. If you were to remove Vishal's roughly around INR 15 crores of revenue from the consolidated number and recalculate, you'll get the number which comes out.
Got it. Got it. Got it. Perfect. Thank you so much. Thank you.
Thank you. Your next question comes from the line of Deepak from Unifi Capital. Please go ahead.
Hi. Thank you for the opportunity. So, first question, if you can provide the mix. Am I audible?
Yes, sir, you're audible. Please go ahead.
So, firstly, I would want to understand the product mix between ADHO and non-ADHO currently. Since we are focusing more on the ADHO category, how is the product split today versus what it was earlier? That is the first question. And the second question in relating to ADHO is that we already hold a high market share in that category. So, what are the strategic levers left for us to tap on so that we can grow higher than the industry growth rate?
Thank you, Deepak. Broadly, what I can share with you is that our ADHO, non-ADHO mix, if you were to look at the other portfolio and ADHO portfolio, you can use the thumb rule of 80/20. Beyond that, we don't give very specific numbers, but 80/20, you will find that rule. Second, coming in terms of, sorry, question. Your point was on category and growth and how you.
Yeah, my question was that we're already the leader in the category. So, what are the levers left for us to grow beyond the category growth rate?
Thanks for the accurate. The way we look at it is that we are playing in the larger hair oil plus coconut oil space, which is being used by the consumer for their needs. We don't see ourselves necessarily as a player only within light hair oil. And hence, we have significant headroom of growth and acquiring consumers in this larger space. So, we have a lot of headroom to win new consumers, and that is what our goal is going to be. We don't currently see ourselves only as a player in light hair.
Okay. Got it. And so, second thing that I wanted to check, in the non-ADHO portfolio, which is 20%, the bulk of it will be coconut oil. Is there any new product that you're thinking of introducing or existing products which can scale up in a big way under the Bajaj brand? Should we hear from you on the new categories anytime soon? And if so, then how big can those categories be?
So, Deepak, coconut is the next sizable, but it is not all of 20%, first of all. We have brands within this portfolio which have the potential of growing much bigger. We've also acquired Vishal Personal Care, which brings in the Banjara's brand into our portfolio, which I believe has a significant scale-up opportunity. And we will also launch some products which, unfortunately, I can't talk to you about till then much. So, you will see innovation from us, but you will see calibrated innovation and spaced-out innovation which will come in quarter at a time wherein we believe we have opportunity to scale up that innovation and make it big. So, you will see action from us on that front, but gradually.
Okay. So, lastly, if you can touch upon the channel mix of our company between general trade, modern trade, and also the geography split, urban-rural, what I want to understand here is mostly the mix between channel and geography and also the actions that you have taken to correct the channel level and geography level wrongdoings that had been in the past, the actions that you've taken channel-wise and geography-wise, both. Thanks.
See, in general trade, we started our work on making certain corrections quite a while back, and we've also suffered pains for it. People who've been tracking our company for a while would know that we started doing certain corrections in wholesale three quarters back. We started our work on our own close to around a year back. What you're seeing is the culmination of all of those works coming in together and kind of working for us at this stage. With regards to the question around what is the mix of business, broadly, what you can use at 70/30 for general trade, organized trade. If you were to take a split within general trade, you can take a 50/50 split between rural and urban. Those thumb rules would, by and large, be totally okay.
Understood. And so, given the disturbance the company used to face due to the wholesale channel and also the rural geography, has all of those issues been solved, or should we expect any further corrections to happen in the subsequent quarters?
Deepak, I find that very difficult to answer, as a certain amount of issues are like a person's health. You have to continuously work on keeping yourself healthy. That is the same way as for a distribution organization. It's not a static thing. You have to continuously work on. But yes, what I would want to give you confidence on is that a lot of work has happened over the past few quarters, and we feel very happy and confident where we are.
Understood. No, why I was asking the question is my assumption was that it could be a structural issue, but by the way you're saying, it seems to be like a cyclical thing, and hope it recovers soon.
So, we've done a lot of work already on rural. I don't think so. There is something which is there. I think a larger part is where I think the qualification comes in more clarified more than anything else. I think in absolute, our rural numbers, our urban numbers, our direct numbers, our wholesale numbers, all in absolute are very good. But when you look at it and compare to the market commentary, most of the companies are indicating that rural performance is better than urban. And I think that is not there in our case. I think that's the only callout being given. Beyond that, there is no problem which is being highlighted or nothing else which is being indicated.
Thanks. Thanks, Naveen. All the best.
Thank you.
Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one. Our next question comes from the line of Percy from IIFL. Please go ahead.
Hi, Naveen and team. A couple of questions from my end. Firstly, on the growth that you have shown, congratulations on that very good growth this quarter. But just wanted to understand how much of it is new outlets that you have reached for the first time and you've placed the merchandise, and how much of growth is coming from that? How much do you think is coming from actual consumer demand? Of course, exact numbers on this are not going to be available, but whatever sense you have from the market understanding, that would help on that. That's my first question, Amit.
Percy, always a large amount would be consumer demand because if you will recollect, we have a reach availability to 4.5 million outlets. So, even when we are going direct and we are reaching the outlet, what is happening is that we are executing the range better. It's not that we are making our product available for the first time. So, it will be very, very difficult to determine that in the outlets which we are directly reaching for the first time, what was the earlier business they had from wholesale, and hence, what is the net contribution. I think would be very difficult.
Fair. Fair.
But yes, there would be some improvement which would be coming of that. And.
Because, Naveen, the reason I'm asking is that, I mean, we've had a certain trajectory of growth, not only Q2, but even before that, I'm not going back too far away where the performance was really bad, but the recent couple of quarters, we had a certain growth trajectory, and now it has really accelerated very materially from that this quarter. Just trying to understand what is the reason. Have we put in some new ad communication which has been a real big hit? Or, I mean, we've taken prices up, so that cannot be a reason for the volume growth acceleration. If at all, it can only suppress. So, just trying to understand what can I hold sort of accountable for this huge acceleration that we've seen this quarter.
A lot of work which has happened over the past few quarters on both brand and.
Okay. Okay, because it's just that it's come very suddenly. It's not been a gradual ramp-up. That is why I was asking, because if it has been over a few quarters, then we should have seen partial impact of that in Q2 also, which we did not. I mean, even interesting for the GST issues.
Sorry for surprising you, Percy, but I don't think.
No, it's a pleasant surprise, so that's okay.
I don't think so we can micromanage outcomes to this level. The team has been working the best they can, and I think it's been a happy quarter for us as well.
But the confidence of double-digit growth going ahead is there, right?
Yes.
Okay. Second question is on portfolio. So, when we had last met, you had basically said that you would make the portfolio more focused. Of course, ADHO and coconut would be the two things. But out of the remaining seven, eight different things you have, you might choose only one or two and de-focus the rest. So, one is, can you give a clearer idea of how you plan to play the portfolio? And second is that we already have so many products in our portfolio. Actually, it's the problem of plenty with many of the small products sort of contributing to a very small scale but large number of SKUs. So, in context of that, I was a little surprised when a few minutes ago you said that there are some more product launches in the pipeline. So, can you just comment on these two things, please?
Percy, I think by and large, from a strategy perspective, I think we are very happy where we are on ADHO and coconut. I think by and large, going forward from here, you will only see tweaks of strategy around this. The bulk of the heavy lifting on what needed to happen on these two portfolios has happened. On the rest of the portfolio, I think we have to do our work. As and when we are ready and we have actioned that work, only then will I be able to come back and tell you of what choices we've made and how we are looking at going forward. The products which you might see us additionally which might come in would also be thought through, and they will come in in specific opportunity areas where we believe we can optimize. Let me take an example from hindsight.
While we are focusing on getting our price indexation on coconut right, as we have seen the opportunity, we've also come up with an enriched coconut oil which we were not doing before. So, we found that opportunity, and we've launched that product, and we feel good about it. So, I think there would be opportunities which will come across, and we have some of them in mind wherein we will introduce new products while we continue to optimize our strategy on the current portfolio.
Sure. And any timeline as to when clarity can emerge on the rest of the portfolio as to what you plan to do with it, whether you will select any of them to be a focus or whether you will sort of phase them out? When do we expect that clarity?
Over the next two to three quarters, we will start seeing most of it happening. As and when we do the changes, we will obviously talk about it. So, when the changes are happening, we will talk about it once they're up. But you should see more clarity emerging on the balance portfolio over the next two to three quarters.
Okay, sir. Thank you very much. That's all from me. All the best.
Thank you, Percy.
Thank you. Participants, you may press star and one to ask a question. Our next question comes from the line of Abhijeet Kundu from Antique Stock Broking. Please go ahead.
Yeah. Hi, Naveen. Great set of numbers and very strong outperformance. One question was that the decline in post-GST revision, the decline in duties, there would have been some correction you must have taken in ADHO, right? I mean, sequentially, there must have been some correction or grammage increase, something of that sort, right? That must have also helped, I mean, to drive overall demand.
So, some packs, yes. Abhijeet, for example, like the INR 1 sachet, we couldn't have made it whatever, INR 0.89. So, obviously, there has been a grammage increase and MRP increase in that pack, and that does support a little bit in terms of extra volume. So, yes, to that extent, on packs where there have been grammage additions because pricing interventions were not feasible or possible, there is a positive volume tailwind because of that action as well.
And on the big packs also, there would have been some correction in prices, I mean, sequentially, because you had taken a little bit of their price hike. So, that would have also played out, right? I mean, that is the reason why overall volume growth has also been pretty strong.
Yes. That plays out more in terms of, so, there are packs wherein like INR 1, INR 10, where volume would have been a plus. And there are packs where revenue would have been actually neutral because in those packs, you would have passed on a reduction in consumer pricing to the extent of the duty reduction, and hence, the net revenue impact would be nullified on those packs.
No, I'm just saying that that would aid demand, right? Consumer demand. I mean, because of the lower prices, some of the consumer demand must have been activated.
I think if you look at it, there has been a positive impact because affordability and the net value to the consumer gets enhanced, and that obviously helps the consumption sentiment. That's the question, yes.
Yeah, yeah. That's the question. That's the question. And in your presentation, you have given about the activations that you have done in Maharashtra. So, it takes some time. It doesn't happen. But there is a good amount of, so do you see a good amount of potential in Maharashtra to really scale up ADHO? Because ADHO has been more of an East Central India phenomenon. So, here also, you see that kind of potential to scale up, right?
Maharashtra is an extremely large market in terms of hair oils plus coconut oil and is obviously of interest to us. What is even more salient is that around Diwali, which is a local celebration in Maharashtra, called Abhyang Snan, which is the auspicious bath before Diwali, ADHO has historically been part of the ritual. That is an occasion which gives us great consumer traction and affinity. We have been very focused on building on that consumer affinity to rather build an overall stronger portfolio and presence in Maharashtra. We are committed towards building that loyalty.
Understood. Understood. Great. Thanks.
Thank you.
That's all from my side.
Thank you. A reminder to everyone, you may press star and then one to ask a question. Our next question comes from the line of Naitik from NV Alpha Fund. Please go ahead.
Hi, sir. Thanks for the follow-up, Percy. So, my question is, you mentioned that we have improved our branding, advertising, and branding efforts. So, to understand, are we spending or have we increased the percentage spend of sales or has it been more effective, or what exactly has changed?
The answer is both. We've given you the detail of increase in terms of the advertising ratio. You'll see there is broadly close to 100 basis points increase in our overall advertising spend on an increased base. And hence, if you were to look at it from a growth perspective, it's close to around 37% increase in the ASP spend. Besides that, we've also been very focused on which brands to communicate. And hence, on the brands and the places where we want to communicate, the impact would be even more amplified. So, yes, it's a combination of both more focused spending and higher amount of absolute spending.
Got it, sir. That's all. Thank you.
Thank you.
Thank you. Participants, if you wish to register for a question, please press star and then one. Our next question comes from the line of Mihir Shah from Nomura. Please go ahead.
Hi, Naveen and team. Congrats on a great set of numbers. Very happy to see the growth and the margins coming back after a long time. Naveen, I'm still quite positively surprised with the numbers. If you can just help us dissect it a little more clearly. If you can share the pricing and the volume growth overall for the quarter, that's point one. Point two is, what is the distribution increase that you have taken which is driving this kind of growth? And point three, in your slide 10, where you highlighted that coconut hair oil portfolio grew in high single digits value, non-ADHO grew in mid-single digits, which means that give or take the ADHO portfolio would have probably, I mean, grown in closer to like 30% to come to the 27% growth. So, with that, is my understanding correct? And then I have a few follow-ups.
Mihir, thank you for your question. What I can tell you is, yes, ADHO has grown in 20s. What we have already disclosed is that the volume growth is double-digit. The rest, you can try and dissect. You said we will not give more details than that. The second part of your question around what has helped and driven that, again, we've said that it's been a culmination of both focus spending on advertising and a higher level of advertising behind the brand, as well as our effort on distribution, which has helped us achieve that. On distribution of your question specifically, we've already told that we aspire to add 10% direct coverage to our base every year. We have already achieved this target for this financial year. We've already done that. And I think that is the best level of info I can share with you.
Okay. No, I heard the 10% figure, but I thought probably it would have been a significantly higher distribution increase.
We've already crossed that number. Is all I can say this year.
Understood. Understood.
Within nine months, we've already crossed that.
Got it. Specifically to coconut, high single-digit growth because if you see the coconut hair oil prices and the pass-on that you would have ideally done, and even with the volume impact, we are seeing the other larger players seeing significantly different growth of closer to like 60% or so. So, where is the disconnect, in my understanding, with that brand versus this one?
I'm sorry, I'm not clear. What is that you're specifically asking me? Are you asking me a question whether our coconut has declined volume? Are you asking a question of what is exactly are you asking? I'm not very clear on that.
There seems to be a significantly stark difference in the growth profiles of Bajaj Coconut portfolio versus the market leaders' growth that we are seeing. They are growing at closer to 60% versus Bajaj.
Yes. There is a significant gap in the profile. We have taken corrections in terms of our pricing. We were operating at a certain discount to the market leader by offering better value to both consumer and trade. We have reduced that difference of pricing between us and the market leader. And that has resulted in our revenue growth being much lower. And that's a conscious correction which we have taken. We've called that out in our commentary.
Understood. Okay. And that would have supported the margins, but the significant expansion on margins also given the exposure to the brand is quite less. So, how should one understand the expansion on the margin front?
Our margins are by and large same as last quarter.
Yeah. But before that, they were significantly lower.
Sequentially.
Yeah.
Sequentially. So, there is no major massive incremental action which has happened on the margin this quarter against last quarter on margin front. We were working on these margins. We have sustained those margins in this quarter as well. In fact, if you were to look at it with the kind of revenue growth, we've invested back at a higher level of advertising and still sustained margins.
Understood. Got it. And the new launches that you spoke about, given the margin profile for ADHO has been significantly higher historically, would you say that the new launches will also be at a similar margin profile, or will there be anyway dilutive, but it will give you better growth? So, that should take care of. So, how should one think about new launches, margin profiles going forward?
On a medium to long-term basis, we would still aspire to improve our margins from the level where we are. And I think that is something which we've outlined. And hence, as and when we launch products, we would be cognizant of that as to how the overall mix plays.
Got it. Great. Thank you for answering these questions. I'll circle back individually to take this up further. Thanks, and wishing you all the very best.
Thank you so much.
Thank you. Participants, you may press star and then one to ask a question. Your next question comes from the line of Harsha from Bandhan AMC. Please go ahead.
Yeah. Hi. Hi.
Sir, you're sounding a bit muffled. If you're using a speakerphone, may we request to use the handset, please?
Okay. Yeah. Hi. Am I audible now?
This is slightly better, sir. Yes, sir. Please go ahead.
Yeah. Yeah. I can hear you.
Sorry to interrupt. Harsh, we are not able to hear you. There is a lot of background noise coming from your line.
Am I?
This is much better, sir. Yes, you can go ahead.
Yeah. Sure. Thanks. So, Naveen, my first question was, could you explain if there is any difference between the primaries and secondaries for us this quarter?
No. No difference.
Secondly, in terms of mix between the packs, right, however you define small packs and big packs, has the salience changed meaningfully, let's say, compared to last year?
Marginally. I would not say very, very substantially. But yes, there are marginal changes.
I'd say, I mean, directionally, how much I mean, has the sales of large packs gone up?
See, I think it's too specific a question for me to answer. But I would say, by and large, we have a certain mix. That mix has changed a little bit. But there's not a heaven and earth change in the mix.
Okay, but directionally, you would want to go more towards the large packs. Is that understanding correct?
Let me say our endeavor would always be to ensure that the more profitable packs grow a bit faster.
Okay. Okay. Got it. Thank you so much.
Thank you. Your next question comes from the line of Pallavi from Sameeksha Capital. Please go ahead.
Yes, sir. Thank you for taking my question. Just wanted to understand, is it, I mean, the third quarter, the category of light oils, has that basically kept? Was that in line with our growth for the category as a whole, or was that the kind of growth the category saw? And my second question would be on the ad spend, if you could share a bifurcation between ADHO and non-ADHO or your ad spend.
Pallavi, apologies, I can't share with you more granular detail than that. But yes, all I can say is that the overall spend on ADHO is higher than our ad spend increase. So, ADHO has seen a higher allocation as compared to previous quarters. I think that is something I can share. Beyond that, I can't give you granular details. Rest of your question on how we've done against the category, you would again see that we've noted that we have gained volume market share, and we continue to be on an upward trajectory, which means that our volume growth is ahead of the industry. And I think that is the sense which we have.
Right. So, this market share, sir, has the category as a whole also gained share is what I was trying to understand in the overall oil mix?
I'm saying market share. I'm talking about market share in the overall hair oiling category, not within light oil. We have gained higher share within the overall hair oil category.
Right. No, sir, I was trying to understand only the light oil category versus the total oils for the category as a whole, not for Bajaj Consumer. Has that category gained share over the total oils category?
Sorry, it's not top of mind for me.
Right. Thank you, sir.
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you so much, everybody, for your questions and for listening to me. I would like to reiterate that at Bajaj Consumer Care, we remain focused on strengthening our brands through enhanced advertising and digital spends, and through our strategy of continued distribution expansion. We would also launch meaningful innovation over a period of time and build our capabilities to drive the next level of growth. Thank you for attending the call. Have a great evening.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.