Ladies and gentlemen, good day and welcome to the Bajaj Consumer Q4 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.
Yeah. 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 Q4 FY 2026 earnings call. I would like to thank the management for giving this opportunity of hosting the call. From the management we have with us Mr. Naveen Pandey, the Managing Director, Mr. Dilip Kumar Maloo, CFO, and Mr. Aakash Gupta, Head Finance. I now hand the call over to Naveen for his opening remarks. Thank you.
Back here to share the update of quarter four FY 2026. In an extremely volatile environment, we've been able to deliver an extremely solid quarter. In this quarter, we registered a strong growth across all segments, channels, and markets, building the confidence behind our brands and the strategy chosen by us. Before I get into the details of the quarterly results, I would like to highlight that we have ended this year delivering a net revenue of INR 1,153 crores at a growth of 21%. This is special for us as this is the first time we've crossed a 1,000 crore mark.
Further, we have delivered a gross margin of 60% and a full year EBITDA of INR 224 crore at a margin of 19.5% and a full year PAT of INR 190 crore at a PAT margin of 16.5%. It has been a year of turnaround for us and sets the base for the company to march ahead. Coming back to the quarter. In quarter four on a standalone basis, the revenue of the company stood at INR 308 crore, a growth of 28% year-over-year. On a consolidated basis, the revenue stood at INR 327 crore with a growth of 32%.
Continuing the work on margin expansion, our gross margin stood at 63% for the quarter and 60% for the full year, registering a significant improvement of around 650 basis points against the last year on a full year basis. This improvement in gross margin, as previously shared, has come on back of a mix of actions around strategic pricing, revenue management and mix improvement. In the previous quarter, we also optimized the ML of some of the key packs, basis consumer insights and revenue management principles, which delivered a realization improvement for us. We feel extremely confident on the place where we have reached with respect to our gross margins and intend to now operate in this same zone over a medium term basis.
Consequently, EBITDA on a standalone basis for quarter few grew by 131% to deliver an absolute EBITDA of INR 78 crore for the quarter, which translated into an EBITDA margin of 25%. On a consolidated basis, our EBITDA was INR 77 crore, which was a growth of 135%, translating into an EBITDA margin of 23.7%. The standalone PAT for quarter four stood at INR 64.1 crore with a margin of 20.8%, and the consolidated PAT was INR 63.6 crore with a margin of 19.5%. In the current quarter, we saw a continued recovery in our general trade channel, which grew ahead of the other channels and has delivered a strong teens growth on a full year basis.
This performance came on back of a strong momentum around key brand ADHO and the distribution efforts put by us through Project Aarohan. Both urban and rural channel, and within the urban channel, the key sub-channels, retail and wholesale, have done well for us. The rural business, which was muted in H1 and saw a revival in quarter three, continued with its strong performance in quarter four. Organized trade as a channel continued to perform well. It registered a strong 20s growth YoY in quarter four, and within organized trade, modern trade and e-commerce performed well and ahead of the channel. However, the performance of CSD/CPC was muted. At a channel level now we have covered a significant milestone with OT as an overall business contributing 30% to our overall sales. This gives us ability and the scale to premiumize and innovate at a much faster pace than before.
In international business, we overall had a challenging year. This business declined in this quarter. In the key markets of Nepal and Bangladesh, however, we saw growth and the highlight for us in this channel was the breakeven of Bangladesh and further margin improvement in Nepal. We will continue to grow the businesses in Nepal and Bangladesh in a profitable and a sustainable manner. At an overall basis in IB, we also had a leadership change, and with the new leadership, we have renewed our efforts behind getting and fixing the markets of rest of world in MENA. I'm confident that we will soon be seeing a turnaround in this business. Moving ahead at a brand level, ADHO has delivered a stupendous year with a full-year revenue growth in the 20s%. What gives us great joy is that while this growth came across PAT groups and channels.
At a volume level for this quarter, we had a near double-digit growth on a brand on an adjusted ML basis and a mid-single-digit volume growth on an absolute basis. We continue to register volume market share gains on the brand on a quarterly as well as a MAG basis. Our consolidated advertising spends for the quarter were up 34% against the same period last year. We are very happy with the SOV intensity being maintained by us and by the performance of our digital campaigns across various platforms. Moving ahead, we are happy to report that in FY 2026, we have delivered a revenue of INR 225 crores from the non-ADHO portfolio, which we internally refer to as growth portfolio.
This portfolio is already a positive contribution portfolio and a profitable portfolio for us, and we will be further focusing on growing this portfolio to around INR 500 crore in size over the next three years. Within this, while Bajaj Coconut and Bajaj Banjara's would be the two key brands in the portfolio, we will use a combination of scaling up some of the existing brands and introducing some new brands to help us achieve our ambition of INR 500 crores. Banjara's, which was in its first year under Bajaj ownership, saw a double-digit growth for the year and a low teen margin delivery. We feel confident about our ability to scale this business further through brand building, distribution expansion, and portfolio augmentation. On input cost, the war in the Gulf has created extreme volatility in the prices of LLP and packaging material.
It has also delayed the price cooling in case of mustard and copra, which have held on to the pre-war levels that have not fallen further as expected earlier. We are monitoring the situation on a nearly daily basis and are taking calls as needed. We believe that this situation will need us to take pricing and optimize cost across the line. We are already in the process of executing these changes. Despite the current situation, we feel confident about our ability to maintain margins in the current approximate range. However, as the situation unfolds over the next month or so, we will refine our strategy and continue to fine-tune our actions over the subsequent quarters. Overall, like we always maintain, we will remain focused on strengthening our brands through enhanced advertising and digital spends, and through further expansion of our digital footprint.
Basically, through such focused execution and continued capability building, we will focus on unlocking the next road of growth for BCCL. Thank you, and back to you, Ashutosh.
Sir, should we open the floor for questions?
Yes, please.
Perfect. Thank you so 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 touch-tone 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 one. Our first question comes from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead.
Thanks for the opportunity and congrats to Naveen. Extremely strong performance. My first question is specifically on Q4. I see that generally in hair oil, seasonality is a bit low, but in your case, you have managed to deliver almost 6.7% quarter-on-quarter sales growth. Wanted to understand, if you could give some color, how much is volume? Is volume the main driver behind the 6.7% quarter-on-quarter growth? And if I see the cost of goods sold, it is down 3%. It's not matching, obviously, if I take a presumption that most of it is volume growth. Is the decline happening because maybe copra has cooled off? Copra obviously is not a very big RM for you. If you could explain this math. Impressive performance, but I wanted to understand this math.
Abneesh, if you were to look at quarter three versus quarter four, what you would see is margins have expanded a bit for us. Obviously there is a margin expansion, and that has come on account of mix change, and positive mix movement for us. Within that, obviously, which brand has done better between Q3 and Q4 is much more sensitive for us to reveal. What you will see is that we have improved margin, but at a volume level, overall, we are in the same zone by and large as we were in the quarter three versus quarter four. Not much change, but within the brand, there is obviously a mix change for a more accretive mix for us in this quarter, which is yielding both a margin improvement as well as revenue uplift.
Sure. Last question. What you said in your opening statements on the pricing part. We have already seen many FMCG/consumer categories have taken price hike. Paints, edible oils, soap companies, adhesive companies have taken price hike. If you could tell us for your company, broadly, LLP plus packaging is what portion of the raw material, because that is fairly understandable given direct and indirect linkage to crude oil is there. Second is, great nine months start to your tenure. How much does the hyperinflation become a challenge? You did mention that the band of margins you are reasonably okay with achieving in the near future. In terms of the template or strategy or in terms of challenge, how big is the challenge given it's a hyperinflation?
Abneesh, for the first one, what I will say is that if you look at seed oils, basically, which is mustard, almond, also behave very closely in line with the overall oil index. Hence, nearly 100% of our cost base is under inflation. It is just that some of them is under maybe a 50%-60% inflation and some is under a 20%-30% inflation. I think the entire cost bucket is under inflation. Where we are fortunate is that we are holding good positions which cover us for a good portion of the quarter, and which will help us buy time to tide over this cycle. Hence, if this thing ends in the near term, in the next few months, I think the impact to us as an organization and what we will need to pass to the consumer will remain limited.
Second portion, I will come to what actions we have taken. In the one quarter four, we have already taken certain ML adjustments, which we have mentioned about, which also basically help in terms of margin for us. In this quarter, I think we will have to take some amount out of retail pricing as well to manage the quarter. I think these two are a given set of actions which we will be taking. Now, quarter two, quarter three onwards, the scenario could be that we might see cooling off and thus coming back to at least a new normal, if not the old prices. If that happens, I think we will be in a much better position.
If the hyperinflation continues as it is continuing right now, we will have to further fine-tune our actions going quarter two onwards to see how we will continue to protect our margins and be fair to the consumers at the same time.
Thanks a lot . That's all from my side.
Thank you.
Thanks.
Thank you. Your next question comes from the line of Binay Shukla from PhillipCapital India. Please go ahead.
Thank you, sir, and congrats for your good set of numbers. Just first question on the general trade. Since this channel has grew up by close to high- teens, so just wanted to get some sense on within the GT. What would be the growth mix between your retail channel versus wholesale channel?
All I'll tell you is the full year basis, GT has grown high- teens, Binay. If you were to look at urban, which is the combination of direct retail and wholesale, has performed higher for us as compared to rural. If you take a high teen number, we are nearly 20s in terms of when it comes to retail, and rural is basically a bit lower, mid-teens kind of a number. I think that is what I'm comfortable sharing.
Understood. Lastly, on the rural side, since your rural market has a growth momentum that was very strong throughout the year, so is it led by a change in the macro environment or is it a category shift within the hair oil basket?
Sorry, can you repeat, Binay, the first part? I was not able to hear you clearly.
The second question was on the rural market. Since this rural market growth was very strong throughout the year, so we are still very keen to know that this growth was largely driven by the improvement in macro environment. Or do you see that there was some category shift within the hair oil basket from upgrading from coconut hair oil to perfume hair oil?
Binay, actually, for us, urban has performed better than rural, if you look at a full year basis. Rural has not outperformed more for us. We are a more premium brand, and hence, if there has been any shift or benefit to the category on the bottom of the end brand, I think we are less likely to feel it as compared to some of the other players. For us, our turnaround in both urban and rural has been a direct action of our focus on our brand, fixing the advertising on ADHO, and basically having strong investments behind the brand, as well as fixing our go-to market through Project Aarohan, wherein we have focused on enhancing our direct distribution and just gearing our system up- to- date.
I think those are the things which have worked for us overall in GT, and that is what we attribute it to. Again, within that, urban has outperformed rural.
Okay, just last question. What percentage of growth improvement should we see from your Project Aarohan initiative in FY 2027?
See, if you were to look at it, what we've experienced is around anywhere given to 2%-3% improvement, delta performance for us in places where we have done Aarohan versus places where we have not done Aarohan. I think that is the kind of benefit which Aarohan is yielding us, and that is what we should keep on expecting from the new states where we will go and deliver Aarohan.
Thank you so much, sir. That's all from my side.
Thank you. Your next question comes from the line of Vivek Gautam from GS Investments. Please go ahead.
Yeah. Congratulations, sir, on good set of numbers. My question is, first one is, are there any one-offs in this quarter, and are these numbers sustainable?
There is no one-off, Vivek Gautam. The only thing is that we have acquired a company in quarter one of this year called Vishal Personal Care, which is seeing its first year into the consolidated revenues. That is basically there is no base to that. I think beyond that, there is no other one-off or any additional item which you should be considering.
Secondly, if the hair oil sector is a sort of a sunset sector, especially in the young generation and the urban generation today versus rural and versus LLP versus natural oil based also, how are we placed there?
Vivek, I don't believe hair oil is a sunset sector. It's a $2 billion+ market with a 20%+ margin, with a 92% penetration. There are not too many categories in the country which have 90% penetration, have basically such large bases, continue to operate profitably and grow at a high single digit year-over-year. I think this question basically has been there for the last 20 years, whether hair oil is a sunset sector. I don't believe hair oil is a sunset sector. It's a mature category, I will admit that, but I don't think so that is something also which is a worry for a company like us. We have extremely high headroom to grow within the category. That's the way I would choose to respond to your view.
Yeah. Actually, sort of playing the devil's advocate, otherwise the numbers have been quite good. What changed, actually, I've recently started tracking the company, sir. What changed the company? Because it used to be, your coming in has proved to be a sort of a catalyst and there were a lot of old brands, Nomarks, Bajaj Amla, and other things, how are they performing and what changed in the last two years of what you do and what have been the steps taken by you to move the company to a next orbit?
I think, let's be fair on the commentary. I think, actions basically start much before they start yielding color. There is a lot of action which basically the team has picked up even before my joining, and we've continued a lot of it and we've added some more after me. Essentially, what is working for us is very simply two, three key things. Focus behind our brand at ADHO, ensuring that we continue to support it with the right level of advertising, go back to our old aggressive levels. Driving distribution and execution on the ground, through projects like Aarohan, but not limited to it, and many more. Really just upshifting priorities and getting the overall execution focus into the company at a high level. I think that is what is working for us.
Obviously, when you are on the early stages of exciting reversal, you get a lot of low-hanging fruit, and hence we are witnessing the benefit of that. Essentially it is these set of actions which are helping us be where we are.
Yeah, especially appreciable in view of the slowdown in India on the overall FMCG sector, our company has proved to be an exception. How is the opportunity size and expected growth rate for us in India and export?
Vivek, we have a less than 10% market share in our category. A less than 10% category player basically shouldn't worry about too many things. We just have to execute and win our space and gain more share in our category. I think that is where we are focused. We operate in certain international geographies. I think we will do that, but our bull's eye focus is, and will continue to remain India while we do some of the work behind our international business. I think India will continue to remain our focus market and we want to gain and get to a much higher market share than where we are currently, and that remains our priority number one.
Southern India especially remains the attractive market for us?
Yes, it does.
Versus north and east?
No, I think all markets are attractive for us. Yes, south is an opportunity wherein we have very little penetration and very low share, and hence the opportunity to have a delta would be much, much higher. Whereas there is enough and more delta available even in the Hindi-speaking belt and Maharashtra and Bengal and the other states. I think there is no single state in the country wherein we would not aspire to gain share. Yes, the aspiration of how much gain will differ from state to state and cluster to cluster. We are at a level where we would aspire to gain share across all single markets, all channels.
Besides hair, the massage oil is also big category, I believe, and health benefits for the same is being recognized on a regular basis now. Yeah. Keep up the good work, sir.
Thank you.
Thank you.
Thank you. Your next question comes from the line of Percy from IIFL. Please go ahead.
Hi, Naveen. That's a good set of numbers. I just wanted to understand what has changed between last quarter and this quarter. In the last quarter's conference call, you had mentioned that, for now, the margins will take a pause at the current levels, which were at around about 18.5%. And then after a few quarters, we will see the journey towards higher margins. Whereas now we have seen, in one quarter only, the EBITDA margin going up 500 basis points sequentially. What has changed for the outcome to be so much different versus what your commentary was?
Again, Percy, the commentary always has to be taken directionally. Please, I will urge that again and again. Coming to your question, what are the two things which are happening? I think one action, which is the action which I talked about, that we have taken certain ML reductions, and these ML reductions have been supported by high level of transaction growth, which has not impacted the overall revenue. Hence, being able to take ML reduction and hold on to revenues as well does expand margin. Also there has been a little bit of favorable mix movement between quarter three and quarter four, which I spoke about earlier.
I think these two things are helping being in a place which is slightly there. Also what you will see is that on an absolute basis, quarter four, the revenue delivery has been higher than quarter three, and there is a good delta between quarter four revenue and quarter three revenue. In our case of a gross margin company, when you have a higher revenue delivery, it flows through. I think you are witnessing a combination of these things to get there. Over-delivery on revenue is also a very key factor.
Understood. The ML reductions have happened before the cost inflation has actually hit. The cost inflation started only in March, and assuming that at least some inventory you have, it will hit probably in Q1 or Q2. Just wanted to understand in light of that, what is the sustainable margin that we should take over the next two to three quarters? Because this 23.2% or 23.4%, whatever you've done this quarter, is on the back of effective price increases through ML reductions before the cost inflation has come through.
Percy, I think what we need to see is that, again, our operating desired range does not change. We said that anywhere from low 20s to mid-20s is where we would aspire to operate, and that is where we continue to aspire. Our objective will always be to enhance revenue as much as we can by remaining within this zone, and I think that is what we will intend to do. As far as coming quarter is concerned, as we speak today, we are not worried, but then, you know, it's a dynamic situation. I think we will remain within this range, is what I spoke about previously. That is what we feel at this moment.
Yeah. Next question is, just wanted to know your plans on the non-ADHO portfolio. You have said that Coconut is one of the focus areas. What else are you going to focus on, and what is the kind of pace at which we should expect diversification in the company in terms of this year you've done 20% non-ADHO. How much should we take over a 12-month period as well as a 36-month period in terms of... I know you can't give exact numbers, but just directionally, whatever commentary you can give.
Percy, we want this portfolio to basically become close to a INR 500 crore portfolio over the next 3 years, which means it has to do a 30% kind of CAGR. Our core brands would basically, we've anyway said that if we do around a double-digit revenue CAGR over a period, we'll be happy. You can basically just do the math and try and see where that lands you.
What is actually the plan, or what is the action that you are?
Within the portfolio, so again, you will see us doubling down on Banjara's portfolio, where we believe we have a significant scaling opportunity. We believe we have a significant scale-up opportunity on Coconut. There are a few brands which we are tweaking and playing with currently, which are part of our portfolio, which we are kind of testing the model and seeing what can get scaled up from the current portfolio. This year, you will also see certain new launches coming to the market, which we are hopeful about. I think it will be action on multiple fronts, and hopefully, some of them will become big to contribute to the INR 500 crore aspiration we have.
This INR 500 crore, would it be independent of any future acquisitions, and that would add to the INR 500 crore? Or are you saying that INR 500 crore is including any sort of, or rather you would need some small acquisition to reach that INR 500 crore in the three-year period?
I think when I'm outlining our aspiration, we are outlining with what we have today. We buy something else, that should come as a top-up.
Understood. Naveen Pandey, thanks a lot, and all the best from my side.
Thank you.
Thank you. The next question comes from the line of Amit Purohit from Elara. Please go ahead.
Hello. Hi, am I audible?
Yes, Amit, please go ahead.
Yeah yeah. Hi. Congratulations. Excellent set of numbers. Just a clarification from your previous statement that you made on volumes. Will be first question asked. You said broadly, volumes are similar. It is a mix improvement and some ML reduction, right? That is how one should think about, right? Is the volume growth broadly closer to double digit or mid-teen in that range? How does one think about it? Because Q3 had a similar kind of a volume growth.
Amit, I'll tell you, we primarily indicate volumes for ADHO because otherwise we have a varied portfolio. We're giving ADHO, which is the main brand, so as to get a sense. We told in Q3 that we had a double-digit volume growth. In Q4, what we have called out very clearly is that if you take MLH adjusted growth, that's just double digit. If you were to not take ML adjusted, but to take just pure, it will be mid-single digit.
Sure. Thank you. Sir, just on the distribution side, one, trying to understand the channel dynamics which is playing out. Last quarter, we indicated that, I think, correct me if I'm wrong, but GT was not doing that well. It is the urban channel which was doing pretty well versus the rural, and the difference was almost 700 or 800 bps higher urban growth versus rural growth. The organized channel continued to do well at that time also, now also. From a broader mix, if 30% is organized trade, which kind of is doing well, growing in twenties. Now the GT is also started to do well. I just wanted to understand, last quarter, there was basically a point that your wholesale channel and direct reach in urban was doing well.
How long do you think that this can continue, especially on the urban side, driving wholesale as well as the direct reach incrementally in FY 2027 for us to have this. Although I understand that the organized rate can be like the rest of the portfolio, if you could give some clarity on this?
See, Amit, the new levers which we have executed in the market have kind of, in a sense, reset our revenue to a new base. Now, this new base will give us, hopefully, a very high growth momentum, at least for another two quarters before it tapers down, wherein we will start overlapping very high growth bases.
Right.
We are also, at the same point of time, executing the next set of levers which are required to continue to drive growth. I think that's how the cycle of growth works. We have executed certain levers which are giving us the benefit today, and we then now are starting to work on the new set of levers.
These sets of levers, one, you had indicated that could be new product launches and your aspiration of going beyond ADHO, and the other would be largely around distribution itself?
Yes. What we've also said is that Aarohan, which has given us good benefits, we are getting into the third phase of Aarohan, which involves us going to five new states where we have not gone so far. We would be executing our entire playbook of Aarohan in these states. We have started the work towards the end of quarter four, and we will work to extract the benefits of the project in those five states through this year.
Okay. Just lastly, on the margin side, how does one think about the outlook for, say, next one, so FY 2027, should we think somewhere in the band of 19%-20%? Or it could be higher also. You have indicated that.
Let me clarify. We don't give guidances. I can't give you a guidance on where it is going to happen, that too in an environment like this, which is our happy zone. I've already indicated, there's no point doing that again. Guidances we don't give. Please excuse me for that.
Sure. Thanks a lot, sir. Thank you.
Thank you. Your next question comes from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.
Hi, Naveen. Naveen , thank you for the opportunity, and good evening. A very impressive performance, Naveen. I just have a few questions. In INR 1,153 crore, what would be Vishal or Banjara's contribution?
Less than 5%, basically, Shirish.
Okay. You mentioned that Banjara is still fully not to the level in terms of profitability. What can change? Is the backend supply chain improvement will lead to a margin expansion or will be scale or maybe throughput?
I think the biggest benefit will come from scale, Shirish Pardeshi, because this business is still a sub-INR 100 crore business. I think as we get this business to INR 100 crore-INR 200 crore size, I think there will be a lot of scale benefits which will automatically flow through, because the categories which we operate in inherently are high gross margin categories. At a gross margin level, we don't have a worry. It is about the net flow through. Also, what needs to be kept in mind, Shirish Pardeshi, is that we are continuing to operate Banjara's as a separate business unit because we believe that is the best way to execute on the business. What that means is that we are not fully optimizing on the cost of integrating to minimize cost. That's a conscious choice from our side to drive up revenues.
I think with scale-up and with the revenues becoming larger, I think would be the biggest lever for improvement in Banjara's profitability. While others will also be, everything which you said will contribute, but the largest lever will come in from here.
Okay. My second question on Aarohan. In the first phase, your areas of operation in Delhi, Haryana, Rajasthan, Chhattisgarh. Is there material change in contribution from these four states which has happened? Maybe if you can help me with the number, what is the current contribution from these four states?
Shirish, I think what I'll tell you is that between Aarohan and non-Aarohan, we are roughly seeing around a 4% delta. That is to the extent of what is coming out of Aarohan. Also, let's say that the businesses which have gone through Aarohan roughly are around two-thirds of our current business, and one-third of our business is yet to go through Aarohan. I'm giving you broad ranges. I think that's the best I can do.
The one-third which you are saying is the Bihar and Gujarat, Jharkhand, Odisha.
One-third is what will go in this year, in FY 2027. Two-thirds has already gone in. Which means that it's already, basically, we have executed our own. The benefits are already fitting into our P&L, and we are continuing to work on extracting more.
Assume that in second half of FY 2027, all the states will undergo through the Aarohan. Do you think this 4% contribution, which growth contribution you're seeing, is sustainable from the entire project?
I think 4% is sustainable. There would be a lap-up which will start happening state by state. That might lead to some tapering, but we have done enough mixes within the current set of states and various kind of models, various people, various intervention. By and large, the delta is holding true for us. I feel very confident about that. When we get into lap-up, I think we will also figure out how it is unfolding.
Sorry, I'm stretching a little more. On this Aarohan, our core product, which is ADHO, is driving the growth, which is there, or it is non-ADHO portfolio which is helping us to penetrate the market?
I think ADHO is seeing a larger benefit, as compared to the other ones. Because ADHO is seeing benefits across GTM types. It is seeing benefit in urban, it is seeing benefit in wholesale, it is seeing benefit in rural. Whereas the other portfolio is primarily seeing benefits in retail, where we are going ahead with that playbook. On an overall basis, ADHO is a larger beneficiary of the ROI exercise.
Okay, last two questions. What is the total FY 2026 wholesale contribution, urban rural mix?
Shirish, the way I will say is roughly 70% of our business is GT. Half of it is urban, half of it is rural. Within the urban half, roughly half of it is wholesale.
That's our by and large basically channel mix as of status.
No, why I'm asking this question, because quarter three, most of the FMCG companies said that the GST stability is yet to happen. My question is more inclined towards, now GST dispensation would have settled. Is there a channel filling or maybe if you can give me a DSR number or maybe trade investment.
There's no channel filling for us, Shirish. There is just no channel filling for us.
This inventory in the trade is normalized to the level before GST revision.
We are very happy with the level of inventory we have actually. Trade has not seen any major stock-up. At a distributor level also, our inventory is very lean, and we are very happy with the status of our inventory and distributors.
Okay. The last question, I think, we've spoken a big number in terms of Coconut and its family. Is these efforts are still on, and we still bank that South is going to be a key entry point with Coconut? What is the effect which has happened? Or it will be a tactical opportunity?
Shirish, INR 500 crore when I'm saying, it is out of the growth portfolio, it is not out of Coconut. It is out of the growth portfolio, which includes Coconut. Coconut will form a part of it. It won't be INR 500 crore out of Coconut. If you've interpreted it that way, then just please take note of that correction. Coconut is an important part of our strategy, but that is not the only strategy which we have. Again, similarly, while South is a game strategy for us, our attempt and our gain is not only focused on South or only restricted to South.
Okay. Last, if your growth in terms of volume ADHO, what is the non-coconut or maybe if you can specify value add hair oils category growth in the quarter?
Value add basically, Shirish, for us, if you were to look at within value added hair oil, 98% of value added hair oil is ADHO, which we already disclosed. I don't think so there's any point further dissecting that number into the balance two.
Okay. All right. Thank you, and all the best.
Yes. Thank you.
Thank you. Your next question comes from the line of Gunit Singh from Counter Cyclical PMS. Please go ahead.
Hi. Thank you for this opportunity, and congrats on a great set of numbers. I would like to understand a couple of things, firstly, regarding the margins currently. We see that LLP prices are peaking and our plastic packaging prices also are peaking. In the previous discussion or previous discussions, you mentioned that you don't see any problems as of now in terms of margins at the moment. I would like to understand how are you managing the situation currently? Is it that you've delayed purchases of raw materials and are waiting for prices to cool down because you already have inventory? I would like to understand how are we managing it.
Gunit, we have inventory. We are being cautious about purchases. We are managing pricing very, very closely and in a narrow band. That's all I can share as of now.
Are we taking any price hikes this, looking at the situation?
Yes. Already outlined in my statement.
Got it. You mentioned that one of the levers for high margins this quarter was our performance in the Delhi New . Generally, for our company, we see that there is not much cyclicity in terms of revenues. Quarterly, they are more or less 5% up or down. Is it fair to consider this around INR 315- INR 320 CR to be the new base quarterly? And considering that we have reached this outperformance revenue, as you mentioned, should we expect the sweet spot of margins that you mentioned to continue, and this being one of the reasons for it?
Gunit, I've already given. We will not give margins on. Basically, we will give guidance on margins. What we've repeatedly said, we aspire to maintain margins between the low- to mid-20s. That is what we'll aspire to do. That's all I can say.
Got it. All right. All the best.
Thank you. The next question comes from the line of Kusha. Please go ahead.
Hi, sir. Congratulations for the great set of numbers. I just want to understand what would be our advertisement and sales promotion strategy going forward in FY 2027?
We will continue with our strategy. Almond Drops remains our focus brand, and we will continue to double down on it. Additionally, on the growth portfolio, we will continue to invest behind select bets, which we will make on a quarter-to-quarter basis to dial up some portions of the portfolio.
Going forward, basically the advertisement and sales promotions are the cost of 15% of the revenue in FY 2026. Is there any decrease in FY 2027 we can expect? Because there are 23% increase in the advertisement expenses, and it's almost around 15% of the revenue. Going forward, is it going to decreasing?
See, what we are witnessing is a very volatile situation on input costs and actions. I don't think so I will be in a position to give you a forecast on a line-by-line level basis as to how we will manage each one of the cost lines and the revenue line. I think it will be impossible for me to do so, if you are asking a question from a year perspective. If you are asking a question from a multi-year perspective, we believe this level of advertising is the right level of advertising for a brand like ours, and we would want to maintain it. What will happen next quarter, what will happen next year, I am not in a position to tell you because this position is extremely volatile, and we will basically respond as how the market behaves.
Okay, sir. Thank you. All the best.
Thank you.
Thank you. Ladies and gentlemen, we request participants to limit themselves to one question each and can rejoin the queue for follow-up questions. Our next question comes from the line of Shreyansh Jain from Swan Investments. Please go ahead.
Hello?
Yes, sir, you're on. Please go ahead.
Yeah. Congratulations on this set of numbers. My first question is, I'm just looking at your gross profit YoY. When I look at your chart relating to all RMs, you see an increase there. Given that we maintain only, I think, 20%-25% of RM inventory on our balance sheet. I'm just trying to understand this 54%-64% improvement in gross margins. Obviously, you mentioned some bit on the revenue front, but wouldn't we have witnessed some inflation on the cost procurement side, or do you think we were sitting on some low-cost inventory for this year?
If your question is consumption inflation as it has been quarter four, the answer is by and large, no.
No. I'll just reframe my question. I'm just trying to understand with the 30% top-line growth, a COGS increase of 2%. I'm just trying to understand how have we managed to do this?
I responded to that earlier in my thing. It's come on back of a mix improvement as well as certain pricing actions. That is basically, you will need to decode it also. Anything else which you want to ask?
Sir, you also mentioned that this gross margin now sets the base for next year. You were talking about Q4 as a base or the full year gross margin of 60%?
Again, as I said, given the volatility of the situation, it is impossible for me to give you any guidance. We anyways don't give guidance as a principle. Further, I think, we can't give you a guidance. What I meant was that we are in the right zone. You have to look at it from the context of where our P&L was four to five quarters back, wherein we were at possibly one of the lowest levels of profitability this company has seen over a decade and a half. I think from that point, we have taken a series of actions to basically get the revenue growth back up, to get the margins back up. I think there have been a set of actions which have followed over the past four, five quarters for us to reach here.
It is in that context, I had mentioned that I believe a lot of the hard work which we had done is behind us, and we have now reached a place wherein we can continue a steady state operation. The task of fixing where we had reached to where we want to be is by and large done. I think it is in that context that statement has to be interpreted.
Okay okay. Got it, sir. Just last thing on the non-ADHO bit, sir. INR 225 crore is the ARR, right? I'm just trying to understand if you remove INR 50 crore-INR 60 crore of Banjara's, so balance would be split in Coconut and Amla, right? Majority of that would be Coconut. Is that a fair understanding?
A large part will be Coconut, yes.
Okay. All right. Thank you so much. Be safe.
Thank you. Ladies and gentlemen, we will take that as our last question for today. I now hand the conference over to Mr. Naveen Pandey for closing comments.
Thank you. It's been a very strong year for us, with revenues crossing INR 1,150 crore and margins recovering back to respectable levels from the all-time lows we hit over in the past year or two. We began our journey of diversification, of reducing the dependence on ADHO, and within that, in the GT channel. I think both on channel diversification as well as portfolio diversification, we are in a good place, and that place sets really a springboard for us to continue to go forward. That is what we would be working on and accelerating. Again, would want to reiterate that we will continue to focus on brand building and focused execution in the market, which we believe will unlock the next layer of growth for us. Thank you everyone for attending the call, and have a great evening.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.