Ladies and gentlemen, good day, and welcome to the Q2 Results Investor Conference Call of Dabur India Limited. As a reminder, all participant lines will be in 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Gagan Ahluwalia. Thank you, and over to you, ma'am.
Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this conference call pertaining to results for the quarter ended September 30, 2022. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer at Dabur India Limited, Mr. Ankush Jain, CFO, Mr. Adarsh Sharma, EVP Sales, and Mr. Ashok Kumar Jain, EVP Finance and Company Secretary. We will start with an overview of the company's performance by Mr. Mohit Malhotra, followed by a Q&A session. I now request Mohit to start the presentation. Over to you.
Thank you, Gagan ma'am. Good afternoon, ladies and gentlemen. At the outset, I would like to convey my best wishes to you and your family for Diwali and the festive season. COVID situation has eased, and vaccination is being ramped up across the country. With mobility increasing, there is an improvement in out-of-home consumption and some of the channels like modern trade and enterprise, which were more impacted, are seeing a revival. The quarter also saw a strong recovery in our food and beverage business and HPC business. The consolidated revenue from operations increased to INR 2,818 crore during quarter 2, growing by 12% over previous year in spite of a high base of 13.7%. India FMCG business registered a growth of 11.9%, backed by volume growth of 10%.
This reflects the two-year CAGR of 15% in the India business and 13% in the consolidated revenues. Consolidated operating profit increased by 9% despite unprecedented inflation across categories. Profit before tax saw a growth of 12%. Our profit after tax crossed INR 500 crore mark for the first time, reaching INR 504 crore during the quarter. The increase in tax was around 5% on account of the step jump in tax rate in India business. HPC portfolio performed well with 16.7% growth, driven by a good momentum across all sub-segments of HPC. Hair oils reported a growth of 27.9% with a strong double-digit growth across all sub-segments. Our market share in hair oils improved by 80 basis points. Both perfumes and coconut oil performed very well, driven by marketing investments and distribution expansion.
Shampoos performed very well and recorded a growth of 20%. Our market share in shampoos increased by 30 basis points during the quarter. Sales of bottles in our portfolio is increasing and touched 23% during the quarter, indicating the traction of shampoos in urban markets for the products. The newly launched Vatika Ayurvedic Shampoo and Neem Shampoo showed good consumer acceptance and performed well. Oral care portfolio continued to post industry-leading growth of 13.3%. Red Paste, our flagship brand, posted a double-digit growth, riding on its strong Ayurvedic heritage and consumer pull. Our market share increased by 40 basis points in the toothpaste category. Home care reported a strong growth of 25%, driven by double-digit growth across segments. Vatika Oil reported an increase in market share of 210 basis points, and Polo mint increased market share by 120 basis points.
Skincare portfolio witnessed a robust growth of 27% with a good traction in all three brands, Fem , Oxy and Gulabari. We have entered the face wash category with the launch of Vatika Face Wash and have also introduced Amla Aloe Vera Nourishing Gel. Healthcare portfolio reported a marginal decline on a very high base. Our healthcare business has growth of 50% over last year, driven by COVID contextual and immunity-building products. Health supplements, including Chyawanprash and honey, showed some moderation, although the two-year CAGR on these brands was more than 20%, and the brands continue to be salient in consumers' minds. This was reflected in the strong uptake in the market share, with the Chyawanprash category went up by 520 basis points and honey by 450 basis points.
We continue to be undisputed market leader in the honey market with strong presence in all channels, e-commerce, modern trade, and general trade. The digestive portfolio registered a good recovery with 23% growth on back of improvement in mobility and out-of-home consumption. While COVID contextual roti products saw some moderation, the flavorants like Hajmola, Lal Tail, Hajmola saw strong growth. Ethical portfolio continued to perform well with growth of 12.6% despite a high base. Food and beverage business was a star performer in this quarter with a growth of 43%. The business saw a strong-
Sir, is Shruti operating?
Around 15%. It is well poised to cross INR 100 crore for the year. Among channels, modern trade showed a strong recovery, growing by 26%. Enterprise business also saw good turnaround, 44% growth. E-commerce business reported a double-digit growth in quantity to around 7% of sales. Retail growth was ahead of the overall growth by around 100 BPS. International business recorded strong constant currency growth of 13.8%, with strong growth in almost all geographies. MENA, our largest market, reported a growth of 12.8%. Egypt grew by 17%. Sub-Saharan Africa grew by 25.4%, and the Russia business grew at 16.7%. Turkey business was impacted by currency depreciation. SAARC business performed well with a growth of 17.6%.
Overall, our portfolio continues to be on a good trajectory with increase in market shares in almost 95% of all the categories. Our focus continues on brand building power brands, expanding distribution, driving innovation, enhancing efficiency, and building organizational capability for being future ready. Inflation remains a big concern going forward. However, our intent is to mitigate this impact through calibrated pricing measures and saving initiatives. With that, I bring my address to a close and open the Q&A and invite your questions. Thank you.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. 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. First question is on the line of Abneesh Roy from Edelweiss. Please go ahead. Abhi, your line is unmuted. Request to please unmute your line and proceed.
Yeah, thanks. Congrats on a very good set of numbers. I've got four questions. First question is on shampoo. You are seeing one of your fastest growth on two-year basis in shampoo. Want to understand here in terms of Ayurvedic what is the salience? Can a repeat of toothpaste happen in this category? You have launched neem Ayurvedic. Is there a pipeline filling which is helping 19% CAGR on two-year basis? And 30% gain in market share also. If you could take through in terms of naturals and Ayurvedic because in shampoo anyway a lot of the competitor products also have some level of naturals unlike say toothpaste. If you could clarify on that.
Right. I'll take your question, Abhi. I think that is a key question where we want to answer in first section. I think shampoo market, absolutely right observation. I think in our view, shampoo will have a very similar trajectory the way toothpaste market has. The salience of herbal market in shampoo is not even 10%, and we can, our market share now to that is roughly around, overall market be around 6.7%. We've been really gaining on market share. This time also, we've gained, 13 BPS, and we reached the highest market share around 6.7% in shampoo. All the variants have done well. We are deliberately and consciously trying to improve our bottle saliency, which is accretive in terms of gross margin to us.
While 80% is the sachet business, but 23% is also bottle saliency that we have registered, which is a very good growth. The salience is increasing in modern trade and also in e-commerce for us. While in GT, still our sachet is the one which is moving more. In long term, we expect shampoo to take the path of oral care, wherein the herbal segment is almost 32% of the total market segment. In shampoo, there's a huge headroom from 10%-30%. There are not very many larger players in the herbal. We've launched a new shampoo, you know, it's Ayurvedic shampoo. Ayurvedic shampoo that we've rolled out is getting a very good traction in the marketplace, and we'll be launching multiple alpha ingredient shampoo and multiple benefit shampoos also in this range.
This is one of the good drivers across this.
Sure. My second question is on Odomos liquid vaporizer. The earlier leadership of Dabur had shown a reluctance in entering this part of a health. If you could take us what is different here, given 4-5 players already there here. Plus, fit all machine also is already well established by many players. Will this be largely like ghee and cold pressed oils in terms of being present largely on online? Or do you see medium long-term being very aggressive even in kirana?
Yeah. This is a very strong brand of Odomos. Odomos market share in the personal application cream market is almost 62%. Year on year, we've been gaining our market share. I think Odomos will increase market share by around 410 basis points in this current quarter also. The brand is very salient. Unfortunately, the brand was only operating in the INR 300 crore category and with 62% market share. For good or bad, we didn't earlier think that this is the way to go. In my view, we have to fish in a pond where there are fishes. Therefore, now we started operating a INR 300 crore franchise with a brand like Odomos. We will be operating in all subsegments of HI with the Odomos brand.
We made multiple attempts earlier also to launch innovative products on Odomos, not very successful. As you know, we'll be getting into spray, we'll be going to LVP, and we're going to next already. This will be across-the-board launch. It will not be a launch that will be restricted to e-commerce, because e-commerce is a very small segment of the LVP market. In terms of our high win and key differentiator also, here we are less invasive and less chemical, and there'll be a natural additive which we'll add in the LVP, in the active.
Pricing-wise, any difference?
Pricing-wise, we will be pretty competitive in the marketplace to start with. Having competitive pricing also, our gross margins are good here in the range of around 50%.
Sure. My next question is on beverage. 17.5% CAGR on three-year basis. How much is the new products and PET, etc., and how much is the volume growth, largely volume growth here?
Yeah. The NPD contribution is almost around 10% for us, almost 9.5%-10%. This year we've launched multiple NPDs last year, and all those NPDs are firing on all cylinders for us. Just to give you a couple of points, our PET bottles that we rolled out in the mango drink, where we compete with Maaza and Frooti, that's doing exceedingly well. This year on the drinks market, we should have INR 100 crore turnover coming only from drink. Our Apple Mini is doing exceedingly well at INR 10 price point. Our 10 rupee price point even in drinks in Tetra Pak is doing exceedingly well. We've launched aerated fruit drinks also. Early days, yes. We are small players, but that's also doing exceedingly well.
Our volume, we've not taken any price increases much in the beverage segment because there's not much of inflation here, and most of the growth of 43%-45% that we see is all on back of volume. That's all.
Last question. Chyawanprash, honey, I wanted to understand where are you getting such a big gain in market share? 520 basis points in Chyawanprash, 430 basis points in honey. Second is this double-digit YOY dip. How would you retain the new customers? Chyawanprash for example, penetration increased in the COVID. How will you ensure that lot of these new customers continue to remain?
Yeah, that's a tough question that you asked me. Obviously, during COVID what happened, there was somewhat such a strong tailwind, and in lack of tailwind, what happened to penetration levels of Chyawanprash, which happens to be so low in the country, actually doubled the penetration. Chyawanprash penetration, the range is around 4%, actually became in the range of around 8%. While we see this, initial headwind in terms of penetration in Chyawanprash. In last one quarter, the penetration has gone a bit down because there was little cutting in terms of healthcare product usage with the consumer. Overall, from 4%, the penetration has actually gone up to a level of around 7%, still if I see a 20-year max. There is a penetration increase which is happening. Chyawanprash is a small category.
To expand the category, we are doing all what it takes to expand the category, to rope in more consumers into it. Therefore the launch of tablet in Chyawanprash, different format, therefore launch of powder format, Ashwagandha. On the back of all this, we are only expanding the addressable market of Chyawanprash and trying to include a little bit MMP consumers into Chyawanprash. Chyawanprash is a very sticky product. If consumers use Chyawanprash, then they stick to it, and the lapse rate is not very high in Chyawanprash kind of a product, and they get hooked on to it once people get used to the taste of it. Lapse rate is not the issue. It's roping in more consumers, creating more awareness, and increasing penetration, which is what we guys are working on.
We've gained 520 basis points because we are the big player. As more players enter into the Chyawanprash market, we strengthen our position in Chyawanprash, and we are the beneficiary of that share of voice going up in the Chyawanprash market. That is how we are getting benefited. 520 basis point comes on back of increased awareness of Chyawanprash during Diwali, the Government of India, more players coming in, better FOGI. We're doing better execution in market place. Pre-season loading and all that is really helping us in Chyawanprash. As far as honey is concerned, while there are other players who enter the honey market, it's a great thing that more competitors are coming in. They're actually increasing the size and the penetration levels of honey market also.
We are again the beneficiary of that FOGI going up. Unlike last time, wherein we were not very competitive and not very aggressive, we lost market share to Patanjali. This year around, we are being competitive, and we are actually gaining our market share. We gain the market share in e-commerce, modern trade, GT, across the board, everywhere.
Sure.
That's why we are also extending honey into multiple other formats that I spoke. We launched honey dates. We extended honey through Frooti variant. We launched Tulsi honey and Ashwagandha honey last year, and all of them are doing well, and we are trending on path of introducing more value-added honeys in the market. Our initiative of taking honey from a therapeutic chest to food continues. That is it, yeah.
Sure. Thanks. That's very helpful. That's all for me. Thank you.
Thank you, Abneesh. Bye.
Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead.
Hi. Hi, team. Congratulations on this performance. I just had two questions. First, essentially, a lot of your peers have called out the signs of a weakness in rural demand, even you seem to have indicated some softness in sentiment toward the run-up to festive. Could you share your thoughts and your take on this? Also, are there any factors which make it possible that we will not have a material impact even if we see a rural slowdown? Thank you.
Obviously it's very conflicting. We are getting different feedback coming in from. As far as the syndicated data is concerned, we find that urban spending better as compared to rural. If you look at the CAGR, this is very optically the case being so. If you look at CAGRs pre-COVID, COVID, post-COVID, rural has been very, very resilient. Rural has been growing. If you actually plot a index, the rural index seem to be at the rate of around 104%, 105% to the pre-COVID, even COVID levels, that rural has been resilient through COVID all through. As far as urban is concerned, urban growth are still not in line with what their pre-COVID growth were. It is still on a recovery path.
Urban growth that you are actually seeing is seen on back of modern trade recovery. E-commerce doing well. The lockdown easing down and mobility actually increasing. That's why urban is growing. Long term, if you plot this going forward, rural will be resilient. If I look at our numbers now, in our numbers we see rural is growing almost at around 12%, and this 12% growth is coming on back of 26% base of rural. Rural is trending to do well. Urban growth is in the range of around 9% coming on back of 18% base. Rural is trending well for us. To leverage this, favourable annual monsoon has been great. The harvest has been fantastic. MSPs have not been rolled out. Rural employment is good.
Unemployment rates in rural are kind of the lowest of this time, and the festive season is coming in. We saw in the month of July and August, rural was doing very well. Only in the month of September we have seen some slowdown. We should not say slowdown, some liquidity pressure in the rural. That also the barometer of that has been the wholesale demand in the hinterland has been a little slower as compared to what we saw in the months of July and August. I think with festive season approaching and people, back on the buying spree and mobility picking up, I think it's a matter of time rural will, in my view, keep trending well, going forward also as compared to urban, at least for us.
We are also putting our infrastructures improvements in place. We've already appointed around 7,000 Yoddha in rural operation for our villages. Our village coverage was targeted to be at around 80,000 and which we have already done. We are around 83,500 already done. Next year we should look at around 90,000 villages to be covered directly. We appointed more sub-stockists and Yuktas also. Rural will be resilient, and I don't think there should be so much of a problem while urban keeps recovering.
Okay, sir. Perfect. I mean, you would not be so concerned about this, you know, this sign is what I kind of read. If that is correct, right?
No, no. I mean, we are concerned with it, but I think the festive season should do well too. MSPs have not been rolled out, and government will take initiatives to see that rural demand remains resilient. We are hopeful on the macroeconomics, yes.
Just the second question is essentially on the margin side. Now, you know, you called out the input cost pressure. Now, the performance this quarter suggests that you've used the levers of cost savings and price hikes very well to, you know, offset this impact. Would you say that we are still kind of confident of maintaining our expectations of flattish to margin expansion in FY 2022? Or would you like to revisit those numbers given the inflation? That's all from my side. Thank you.
Yeah. For me, inflation has been tough for us. We thought that there'll be a little softening of inflation which will happen in quarter 3, but the projections that we are getting for quarter 3 is also inflation only picking up from there. We are not seeing any signs of softening happening in inflation. That said, to offset that impact of inflation and continue to stage inflation, we've taken price increases. In our segments of Foods, we've been able to mitigate all the impact of inflation through price increases, cost savings, et cetera. In our Healthcare business, we have taken more price increases to more than cover up the inflationary impact in Healthcare. In HPC business, which is 50% of our business, in 80% of our subcategories of HPC also we've been able to cover up the impact of inflation.
Barring hair oil and healthcare, where we are letting up ourselves only, and we are not taking very aggressive pricing increases because we think demand is also recovering from COVID mobility ease out happening in the market. As you see, the syndicated data also tells us the hair oil market itself is around -2%. In a market which is showing a volume growth of around -2%, we don't want to take a pricing increase in a hurry, and we want to wait and watch, and we want to wait as much as we can. That's where the maximum impact of inflation is also. We are deliberately not pushing, and we are being calibrated there, which is the aerosols portfolio, where we are dependent on price point, lower price points, and also the market is really competitive here.
That is what we are waiting and watching. If push comes to shove and if inflation doesn't abate even in the third quarter or in the fourth quarter, then we'll be forced to take another round of pricing increase across the board. One advantage with the company, Abhi, is that we have brands which are market leaders in the category, and they are the ones who set the pricing table. We are able to dictate the prices there. Be it our healthcare range, our juices range, our home care product range, even juices where we are market leader and in other segments of oral care where we are market leaders in the Ayurvedic sub-segment. We are able to take the pricing increases.
We ourselves voluntarily are not really pushing the envelope of the pricing increases so that it doesn't have impact on the demand. For us, volume share gain is most critical. That said, we want to maintain operating margins for the full year.
Okay. We'll maintain that. Thanks a lot, sir. This is extremely helpful and happy Diwali in advance. Thank you very much.
Thank you.
Thank you. Our next question is on the line of Shirish Pardeshi from Centrum. Please go ahead.
Hi, good evening, Mohit and team. Thanks for the opportunity. Happy Pongal wishes. There are two questions which I see here. Is that the NPD what you mentioned is about 7%? Is that correct number for the quarter?
Only in the food and beverage segment is around 9.5%-10%. That's the food and beverage segment, Shirish. Overall NPD ratio is around 4.6% for us.
My question related to this is that there is a lot of noise and most of the companies are talking about B2B, B2C brands. Are we making some efforts to exclusively have this or we will use the traditional product extension strategy and getting more aggressive into the D2C?
Now, on the B2C, we are making efforts and by end of December, hopefully we should have a platform which is our direct B2C connect. That B2C connect is besides the regular conventional e-commerce connect on B2C that we already have. In terms of NPD, we are launching exclusive e-commerce brands. Our innovation rate in e-commerce portal, which is around 7% of overall business, is in the range of around 10%-12% also, besides the food and beverage business. E-commerce NPD are really much ahead because this is a creator for us to seed a lot of innovations. Those are exclusive e-commerce brands for us. Like you've seen the apple cider vinegar, you've seen the virgin coconut oil coming in, sesame oil coming in. You know, all these are our baby care range happening. Now we launched diapers.
These are all e-commerce exclusive initiatives that we have rolled out. For that's a trail of innovation for us, and we'll be keep seeding brands which are B2C connect exclusively on shared portals, which are like, Amazon, et cetera, and try to create our own portal also for B2C connect with the consumer with the objective of creating a first-party data, and which will help us in our conventional, route to market in terms of reaching out to the final consumer. That's the plan on B2C.
Okay. My second question is, and thanks to Mr. Adarsh Sharma. We have seen, I mean, you have guided about 55,000-60,000, 65,000 village covers, and you are much ahead of time, and you're covering 84,000. Could you spend a minute or two explaining that what is it that it means to the revenue growth? Is that momentum, the coverage? You mentioned about 7,000 low bars. What is it that in the second half we can expect? If the throughput is going to improve and you're also indicating that you will try to get it to 90,000 villages.
We continuously want to grow and keep investing behind our rural infrastructure, where Dabur is actually the frontrunner in terms of creating that entire infrastructure. We have got the seeding operation right, Yoddhas, and this is yielding great results for us. In the beginning, we appointed Yoddhas in only the Hindi belt, which is UP, MP, Bihar. These three states have been identified, and we have appointed Yoddhas there. Now we are extending these three states to six states, wherein we include Maharashtra, we're including Gujarat, and we are taking West Bengal also into account, and we are doing the seeding operation. As the business scales up, what happens in the seeding operation, we appoint our rural village-level entrepreneur. We create a stocking point there.
As the business scales up, we convert them into a sub-office, and the business is on the road there. They become the integrated part of our Supernet sub-network. That's the way we are doing, and this has given us a very rich dividend. We've been able to beat any sort of depression or compression in demand which may happen in the rural. We are not witnessing that. On back of that, I think retailers are doing very well. We are also simultaneously creating our low unit price points and accessible price points which these villages can absorb, which is INR 10. In the presentation we also shared with you, Sevantras we created a INR 55 price point. Sevantra was a INR 200, which could not be afforded by rural, and rural is 47% of our business.
We've introduced a smaller price point so that that can raise the rural infrastructure and the consumers can benefit from these products at the right affordable price points. I don't know if I got your question right. I hope I answered.
One follow-up, if you can spell out this volume growth, what you have reported is the fact that your coverage in rural has gone up. I would tend to believe that our direct coverage also would have gone up. Could you spell out what is our direct coverage? The second part in that is that, does that mean that our dependence on wholesale has come down because our throughput and direct coverage will improve our efficiency?
Yeah, definitely it is coming down as we speak. Wholesale reliance is coming down. That said, wholesale still remains a very important and essential part of our business. Wholesale contribution to the business is in the range of around 30% odd, and it used to be around 33%. Still it's around 30%. It is a channel that we can't ignore at all, and we are very conscious on rate stability on cash and carry because it disrupts this channel and we see a lot of disturbances coming on account of the cash and carry channels also. Our direct reach has gone up. It used to be 1.2 million.
We have increased it to, as we speak, around 1.3 million, and going forward next year we are targeting a 1.4 million reach, total direct reach. This should, I think the objective is to reduce the reliance on wholesale and go direct. Because if you go direct, you sell a higher assortment and more number of SKUs as compared to wholesale, which only sell the A-class SKUs.
Thank you and all the best to you and Mohit and team, and all the best for the brand.
Thank you, Shirish. Happy to have you with us.
Thank you. Our next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead.
Hi, good evening. Couple of questions. First on the hair oil business, I mean, there's definitely been a step up in the quarter revenue and rate annually build upon all the segments doing well. Then the margin pressure also. Between volume growth, market share, margin pressure, how are you looking at this segment going forward? How competitive are you willing to be to drive volume growth over here?
Right. Hair oil is a market on account of uneven distribution. I don't think it's fully recovered from the COVID. If you look at the syndicated data, we see the hair oil market -2% as we speak. Whereas, we guys are not really affected by market not growing because our task is to take share from the competitor and all subsegments will be doing well. As compared to market declining by -2%, we guys are growing at +28% in hair oils, as all the subsegments of hair oils are growing for us. First of all, coconut oil. We've grown coconut oil market, our Anmol brand has grown by around 23% and done very well for us, and it's continuously growing. It's probably become INR 166 crore-INR 200 crore brand for us.
We'll be premiumizing program also going forward. Coconut is doing well. The second subsegment is perfumed hair oils. In perfumed hair oils, both our flanker brands and the hero brand Amla Almond are also doing well. The Sarso Amla, Haldi Amla, Badam Amla flanker brands are doing well. The third market is almond, and almond oil is opening up for modern trade, and almond oil being used heavily in modern trade is also registering very good double-digit growth. That said, our market shares have gone up in all these three segments. We've gained 80 basis points market share in overall hair oils, including all the subsegments here. We are very positive because the headroom is huge in hair oils. We are only around INR 1,000-odd crores and the market size is around INR 10,000 crores.
There is always scope of to play. Our Anmol is already a number 2 brand to the market leader now. We've replaced the number 2 brand already existing, Shalimar, and now we are the number 2 here. So we are very positive about the hair oil market, and we continuously keep striving. That said, there's a lot of inflationary pressure in hair oils on account of hydrocarbon linked raw materials going up and also packaging materials going up, which is PET and HDPE linked. So there's a pressure, but we are trying to absorb that pressure. We are not passing that pressure of margins to the consumer as we speak, because market share gain is more important. Hair oil is a business, only 10% of the overall business of the company, and it's not something that we are completely dependent on.
We can try to relieve as much as possible. That's what we are trying to do.
Got it. Very clear. Second bit on the HI business. You alluded to that you played in all the segments. How widespread is the launch already? Is it national or what percentage of your total, let's say, umbrella of outlets it is already reaching and timelines to distribution here?
We've just started. We've just now said we are now available in e-commerce and in modern trade to start. This is then gradually, slowly we'll be rolling it out in the other channels. We will not be launching in GT to start with. It'll be first in com and then modern trade, and then eventually it'll be rolled out to other channels also. It's a very, you know, early beginnings that we have. Odomos is doing very well for us. But in the other categories we've just seeded our entry.
Got it. The last bit, again a little bit on margins. I think you talked in some of the previous quarters that the A&P spend is, or your aspiration is to get it higher north of 9.5%. If I look at what's happened in standalone and consolidated, in between the 6.5%, 7.5%. How should we be thinking about this line item, especially in the current inflation scenario?
Right. If you look at A&P expenses and so on, A&P expenses is just not advertising, it's the ATL, but also BTL. It depends upon the demand, the situation in the marketplace, competitive intensity, FQ, channel mix, product mix, it all depends. Most important is competitive scenario. If we find the competition is very aggressive on the trade layer, then we channel more resources on trade and gain market share. If we find that if consumer is getting more value and there are more discounting, then we channel the resources to giving more value to consumer by way of giving him consumer promotion schemes. If we find the market is under penetration, then we invest the money in increasing the market penetration and therefore advertising.
If you look at overall A&P spend with the company, A&P spend has been in the range of around 2.5%, which is in line with our top line growth. That is good enough. That's not got diluted. What you see, what is visible to you is only the ATL and the TV spend. TV spends have been optimized, and that has been done because last year there was also a lot of COVID contextual advertising, which is not coming in this year. There is a efficient and optimized spending on ATL, which has actually happened. That said, we will be backing up our power brand and the innovations with sufficient investments so that our market shares don't go down, and that's what we are committed to doing.
Overall for the whole year, we'll be investing around 7%-8% on ATL, et cetera, whereas BTL is even higher.
I'll just add on. You know, on a year basis, the ATL has been 18%. Last year it was 6.5% sales in this quarter, and this year it is 7.2%. On a consistent basis, two-year basis, we have increased it by 10% also every year.
Got it. Very clear. Thanks for the answers, Mohit and team, and Shubhdeep, I'll be talking to you over at lunch. Thank you.
Thank you. Thanks for the happy one. Thank you.
Thank you. Our next question is from the line of Percy Panthaki from IIFL Securities. Please go.
Hi team. Congrats on a good set of numbers. On hair oil, just one data point if you can give me. Your two-year CAGR for the revenues is 9.5%. What would be the two-year volume CAGR in the hair oil business?
I think it should be in the same range, Percy, around 7%-8%. We've not taken much pricing increases in the hair oil business. Because of the competitive intensity, our focus has been to gain market shares and not much price increase we have taken here.
Can you give some data on the broad basing of your hair oils business? Versus, let's say, five years ago or something, your main unit, which is your Dabur Amla hair oil, what salience would that be five years ago, what it is today, so that we can get a sense of how you have broad-based your business with different sort of sub-variants.
I think overall, if I compare a couple of years back, Dabur Amla was Dabur Amla as a brand simply comes with flanker brand family. It's safe to say now, flanker brand is now contributing to more than 10% of the 10%, I think 15% of overall sales of Dabur Amla. Gradually, slowly, that pie of the business is also growing and we are taking share from the cheaper players in the marketplace who half the price within flanker brands.
I think around 15% of the salience of hair oil should be the flanker brands that we introduced. Therefore, we say that flanker brand creating a moat around our main brand, Dabur Amla is working well for us. I hope that's the question, Percy, that you asked.
Yeah.
Yeah. Just want to give you the salience of coconut oil, and that is also. Anmol brand was very small. Now it is very significant, and we are aggressively growing that.
Understood. You also mentioned that your innovation rate is 4.6%. How do you define this?
Innovation is defined by NPDs that we roll out in the current year and last year, so that's all.
Does that mean in FY 2021 and FY 2022?
Yes, that's right.
Okay. Basically, if I glance, let's say, two years into the future, would you think at that point of time also your innovation rate will maintain more or less at this kind of a level?
Yeah, I think that's the least we can do. I think if not more, it will be in the range of around 4%-5% consistently.
Okay. I know this is sort of sensitive information, and I'm not looking for any exact sort of answer. Broadly, in which areas would you focus your innovation going ahead? Till now, I believe your innovation has been at least in terms of number of launches, been more focused on health, immunity, hygiene, et cetera. In value-wise, yes, one fruit juices will be a big contributor, just that one innovation. Going ahead, in terms of number of innovations, would the focus shift from health, immunity, hygiene, et cetera, to something else?
No, Percy, that's not been our track record. We've actually been doing innovation across our eight power brands. The logic is when we have eight power brands, we have to scale them up, we have to make them bigger. Our innovations are coming under every power brand. What you see is under Chyawanprash and honey, we've used capsules and powders, and honey has gone into spreads and throat relief and all that. That said, even in Odomos, for example, home care, which is a home care brand for us, that is also being extended. Réal has got extended into drinks and Réal Activ Apple. Innovation, both at the Indian end, which is the LFP end, and at the premium end as an e-commerce end. That's how we are trying to capture innovations at every power brand.
In addition to that, we have a RISE mechanism, so regional insights which we capture, and then we see innovation for every region for us.
Right.
It is across the board contribution.
Understood. One last clarification here. In the innovation rate, I know it would not be adjusted as a number, but would you also, at the back of your mind, have some calculation as to the amount of cannibalization? Because if it's some kind of a variant and not a completely new subcategory you are entering into, a variant will give you sales, but it will also cannibalize some existing unit. So the actual addition to the sales might not be 4.5%, although those products which are launched in the last couple of years might be 4.6%.
No, not really. The way we see it, we see an incremental addition to the turnover of a product, and that's how we see innovation. If you say it will cannibalize, yes, it will cannibalize, but that's a conscious cannibalization. It'll be a weeding and feeding. The more you feed, the more you grow. That's the way we look at it. Every brand has been given a task or a KPI of having a 5% incremental revenue coming in from innovation. Not only innovations, Percy. Do you know what I'm saying?
Right. Got you. That's all from me. Thanks and all the best.
Thank you. Thank you, Percy.
Thank you. The next question is from the line of Arnab Mitra from Credit Suisse. Please go ahead.
Yeah, hi, Mohit and team, and congratulations on a very good quarter. My first question was on, you know, fruit juices or beverages, where you've grown very strongly and after a long time we are seeing a two-year growth in this category being strong. I just wanted to understand your confidence level in terms of is this really marking a turnaround for that business or were there some specific factors in this quarter which could have helped this growth? I'm kind of guessing that as the channels were reopening out of home, there could have been some restocking in this category and things like that. Just wanted to gauge your confidence in terms of is this really a turning point, and would you kind of continue at reasonably good growth rates into the second half?
Yeah, Arnab, we are very confident. I think, we've turned the corner on the juices business. To your point, there are both reasons. One, the market is easing out and therefore mobility is increasing. Out of home consumption and in-home consumption both are fired as far as juices is concerned. We've gained market share because our category of market which was declining is now growing at 37%. There is also a tailwind of the market. I would not say it's only our initiatives only. The market is growing by 37%. We've grown by 43%, and therefore our market shares have gained around a hundred basis points. Our NPD has contributed to around 10% here. Most of the initiatives that we put in place have also fired.
On back of all this, I think if COVID wave three doesn't come in, then I feel that this is in a good place and should keep firing for next couple of years at least.
Just to follow up on that, on the NPDs, the honey dates as well as the fruit drinks, how far are you on the distribution here in terms of where you would potentially want to be versus where your products currently are available?
Well, there's a huge headroom available. We are not even scratching the surface as far as distribution is concerned. First we are looking at the immediate frontier, which is our Réal distribution. First drinks will cover that distribution. And as we cover that distribution, we will keep appointing distributors who are very... There will be a different ecosystem altogether for indie outlets, so that we have the next milestone in place for us. That said, huge headroom. We are not even covering 10% of what the drinks is today in terms of the universe.
Understood. My second and last question, Mohit, is that this entry of this launch of Dabur Vita, which I'm assuming is the MFD and the new and the Odomos, these are obviously very large categories. A lot of advertising spend happens in these categories. While I do see the point of kind of making the frontier bigger, is it spreading too thin because would you have the ability to do advertising in those categories where the incumbents do a lot of advertising, and also in the context that you have Hommade, which you want to scale up. Just wanted your thoughts on that choice that you are making.
Yeah. Arnab, we are not launching very many new brands actually this year. Hommade is a brand which has always been existing and always been salient. We are just scaling up that brand, which will be INR 100 crore. Next year we're looking at INR 200 crore coming out of a Hommade brand. That's one, which is an existing brand for us. Vita is the extension of Dabur brand, and we are promising immunity plus close to the consumer, and it's the right to win for us to increase the addressable market size. NCP, we are launching. It is not an autonomous brand. It's very premium in the consumer's mind. It is just an extension. I don't see them as very new products.
Yes, there is a requirement of advertising, and that we believe that we will be going in a calibrated manner in the modern trade first in selective outlets. The requirement of advertising would be limited, as compared to mass advertising. We are not spreading the product too thin across for it to require mainstream advertising. We'll be going in a very slow and a calibrated approach, gradually, slowly, geography by geography, channel by channel, to see how it actually grows.
Okay. Thanks so much for that.
Thank you, Arnab.
Thank you. The next question is from the line of Harit Kapoor from Investec. Please go ahead.
Yeah. Hi, good evening. I had three questions. The first one on the innovation side. You know, is there a measure that you're using on kind of judging success rates of these innovations? Maybe, you know, all that you've done over the last two years, it has been fairly significant. You know, how do you kind of judge success rate? Is there a metric? If you could share anything on that side with us.
Right. Harit, couple of metrics here. First of all, as we launch a product with a set KPI, which is a turnover, to be achieved that turnover, then we have a list of outlets where we reach out. What is the repeat purchase rate coming in from the outlet? If the hurdle rate goes beyond 20%, then we attribute success to NCP. If the hurdle rate is less than 20%, then we keep reworking and refining the mix till the time we correct it and we increase the hurdle rate. Once the hurdle rate goes up to 20%, then we grow this beyond a point. That's the way we look at a metric. Then as we launch the product, then immediately we do a launch track to refine the mix going forward. That's the way we work.
In the last two years, I mean, you know, what would have been that success rate? Is it higher than what you did with the previous two or any, anything you could share?
Yeah. NCP success rate has been very good, except the COVID contextual portfolio where we got a pushback, which is the sanitizer and the home and hygiene portfolio. There we have seen the market only shrink, which is sanitizer market. There we made a good turnover of INR 100-odd crore. That's been reduced to around INR 7 crore. That's been negative as far as our success rate is concerned. Rest of the places wherever we launched our products, be it healthcare or beverages or HPC, we had a significant good rate of success.
Got it. The second, you know, question was on the rural side. Compared to 18 months back, you know, pre-COVID versus now, you know, has the overall share of rural India business increased? Because, you know, rural has also grown faster, and you have also, you know, sharply increased your distribution on the village side. Has there been an increase there? And if yes, what, how much is that?
Yeah. Rural has been growing faster as compared to the urban for Dabur. I think only in the quarter 1, where post-COVID, you know, the recovery of urban happening, urban business grew higher than us. For us, overall rural contribution is around 47%-48%, depending which quarter to quarter. It ranges between 47% to around 49% for us. It's been almost remained pretty much similar from 47% to around 49%. As we speak in the current quarter, it's around 47% for us. Rural is growing at a much faster clip as compared to urban.
Pre-COVID, this might have been a little lower than 47%, right? I'm assuming.
Right. Around 45%,
Got it.
more or less.
Last question was on the bandwidth side. You know, with sharply increasing distribution on rural as well as, you know, with significant new product and new category introductions which you're doing. Over the last five quarters, people costs such as employee costs have actually grown below sales growth. I just wanted to understand, you know, to support both distribution and increasing your TAM on the product side, you know, do you envisage, you know, at least in the near or medium term, sharper increase, at least on the employee line item to kind of handle this? Or do you believe that, you know, you can still derive leverage from there?
We are consistently investing in the front end. Be it advertising, that investment is going on, and A&P investment is also continuing as you would have seen our infrastructure. We are appointing more number of sub-stockists. We've appointed more number of PO Plus. And those are distributors for us. That is a seeding operation. That doesn't cause increase in terms of overall S&M cost. What cause for increase in the cost is engagement programs. We embark on general engagement program, modern trade engagement programs and e-commerce programs, which cost money, but that's adequate enough for us to scale the volume of business kind of is coming in. We have a volume growth of about 10%.
We are easily able to subsume the cost of infrastructure increase and get a positive operating leverage, because the volume growth and the value growth is higher and that's happening. That said, we are continuously investing on infrastructure and people also. What we've done of late on the competency project is that we've increased the span of control. We've reduced people at the top, and we've increased our people strength below. That said, investments in front end is our priority. We will get a leverage from indirect overhead and staff costs, and we keep investing in the front end, and that's the priority for us.
Got it, Mohit. Wish you all the best. Thank you.
Thank you.
Thank you. Our next question is from the line of Richard Liu from JM Financial. Please go ahead. I think we have lost the line for Richard. We'll move to the next question from the line of Alok Shah from Ambit Capital. Please go ahead.
Yeah, hi Mohit and team. Congratulations on a great set of results. My first question is on the rural distribution that you mentioned that it is being served through Yoddha. I just want to check that who serves this Yoddha channel currently? Follow up to that would be what would be the revenue contribution that you get from the incremental 20,000 villages that you added, if you have that number handy.
Alok, sorry, I couldn't get you. You were very garbled on the line. Can you please repeat your question?
Yeah, my question is, you said that the rural distribution strategy that you adopted is being done through Yoddha currently, and you know, they are more like village level entrepreneurs. The question is, does Dabur directly service this Yoddha or are they being serviced through some intermediary?
No, we directly service Yoddha. Through a Super Stockist we serve the Yoddha, and Super Stockist takes his operation wherein he appoints the Yoddhas in digitally unserved villages, and that's how it becomes a stocking point. We have a rural sales promoter who actually go and appoint these Yoddhas and create a stocking point over there. That is cash and carry operation which these guys have got, and we don't extend modes of credit also to the Yoddha. That's a business streamlined and the person is converted into a sub stockist.
Got it. Basically that is a channel where you do not intend to have a channel conflict, going ahead because there's lot of new channels which are coming who are trying to tap this untapped rural. Is that understanding correct?
Absolutely. Yes. These are completely hinterland villages that we are talking about which are not served actually. Here we do not see too much of conflict. We are actually working with other players also. In Maharashtra, there are a couple of other players which we are working with them also with the feeding operation. There's a joint work which is happening with them. Yeah.
Got it. My second question is on D2C. Now, you know, Mohit, ever since you have come as CEO, you know, Dabur has been very adaptive to anything, you know, with the changing, be it the time of COVID, you know, the digital launches, et cetera. But in D2C platform, you know, somehow you have taken time. Now according to my understanding, you know, maybe your products are absolutely ideal for D2C with high gross margins, ability to increase your LTVs, lower CACs, et cetera. But somehow, you know, we are still targeting about, you know, few more months after which we'll plan and then we'll invest behind it. Can you share your views as to, you know, why is it that, you know, on D2C platform you've taken some more time possibly?
Yeah, Alok, I hear you. You're absolutely right. I think you observed it correctly. When I came to the India business, there was a platform which was created for Ask Dabur, which is a D2C platform that we guys had created. It was a direct platform wherein we were soliciting orders from the consumers, and we were serving consumers our products. It was a complete failure. We had almost around INR 10 crore-INR 11 crore which has been lost in that operation because it was an operation where the consumer used to put up the order. We used to service that order. When he used to take the order to the house, he used to cancel the order because it involved cash. We were bitten by D2C, and we had huge losses that we had taken.
We want to be very careful with D2C this time. The D2C operation that we embark on is not going to be a revenue model operation for us. It is more going to be a brand building and giving the first party data for us. It's a marketing tool rather than being a commercial tool for us. That is why we are taking time. We are working with a couple of vendors who are helping us building this, D2C model for us, which could have a suited brand that could be available to our existing brand portfolio also. We are taking some time, but I think we want to get it right this time as well.
Got it. Mohit, my last question is on your cash and liquid surplus. Now, broadly, you know, you have close to about, I think, INR 5,000-INR 6,000 odd crores cash plus liquid investment sitting in your books. Now, you know, what are the alternate uses for this? Are you looking at some acquisition very seriously? Because while in the past also, you know, you have mentioned, but, you know, domestic acquisitions they have really not come by. You know, what can we think of this cash surplus that you have on your books? That's all from my side.
Thank you.
Right observation. We are getting almost INR 5,600 crore cash. It is solidly there, you know, almost INR 4,500 crore at an India level. We keep on evaluating, you know, right opportunities, which are very strategic from either the product portfolio mix or from a geographic perspective. They have to come with the right value and at the right time for us to invest. Yes, we are open to opportunities, as you said, for the right, you know, strategic fit. We would be keen on investing, going forward. We are evaluating.
Any hurdle, you know, timeline where you would think that, you know, if we don't have then, you know, possibly it is, you know, we will increase our dividend payout or look at some alternate ways of cash repatriation? Any thoughts?
In terms of see where we are, we are evaluating, but it depends on the timing. It depends on the right opportunity. When will it come, you know, how, where we keep on doing the due diligence, also. But both the parties have to agree at the right terms for the, you know, planning to, for the.
Also, if you remember, in the month of May 2021, we have increased the dividend payout to the shareholders.
We increased the dividend payout so that's what we've done. Acquisitions are a chance event, and we can't really plan the acquisitions. We can plan diligence, and we can do market working. That's what we keep doing all the time and evaluating targets to Ankush's point. You know, we can't have a fixed timeline. It is a big chance event.
Absolutely. We understand, sir. Thank you very much and Happy Diwali to everyone at Dabur Group. Thank you.
Thank you. I wish you and family a very Happy Diwali too. Thank you.
Thank you.
Thank you. The next question is from the line of Harsh Shah from HDFC. Please go ahead.
In my view, you have, you know, consistently spoken about the massive opportunity in health supplement category, you know, given the growth and the penetration of the products. The growth, as you know, one might anticipate, has moderated. Couple of questions here. Are we looking for new categories honestly, say, outside of honey or Chyawanprash, say, involved in nutraceutical space? Secondly, with COVID most likely behind us, do you see there is a need to revamp the communication as most of the products across multiple categories, you know, are being marketed as protectors against COVID, and, you know, there might be a need to change the consumer perception. And lastly, you know, you have mentioned about the stickiness in Chyawanprash. I just wanted to know, you know, who would be the larger audience here.
Is it the senior folks or is it the youngsters? You know, just wanted to check if you are doing any white space mapping here.
Harsh, your voice wasn't very clear, but I think what I understood is you're saying that are we planning to get into other categories besides Chyawanprash and honey. I think the answer is yes. We've already gone to the nutraceutical markets by entering the Pure Herbs. We've already launched a range of Pure Herbs in the marketplace, and gradually, slowly we are scaling it up. The range of Pure Herbs that we've rolled out, the Ashwagandha, the Giloy, and multiple of Pure Herbs. Pure Herbs in both capsule form and also in form of powders is what we've rolled out, and we're gradually, slowly scaling it up. Now, answer is, are we planning to explore new white spaces? Yes. We have plans to get into OTC space, which is white space as far as we are concerned, and we feel we have a right to win.
Therefore, Dabur Vita is being rolled out in that space. It's a huge market with big A3. That's what we are planning. Is there a second part of your question also?
Chyawanprash audience.
Yeah. The target audience for Chyawanprash is more adults and who have low immunity, and they are the ones who actually use it. It's made for the family, for kids and for adults and for the whole family. After COVID, the product has become actually a family product and not only for adults. The perception, to your point, is more adult today. It makes the entry from the adults, and then it's being used by the family, the mother and the child and everyone. To improve the organoleptics and the sensorials of the product, we are working on it. That's why Chyawanprash will be in the tablet form and also going forward, a powder form will help us broaden the target audience of Chyawanprash from adult to the kid and to the mother.
This Dabur Vita initiative will also help us with it.
Understood. That was very clear. Secondly, we have a big ambition in food business. I think we are aiming for INR 500-odd crores in next three to four years. Wanted to understand what specific categories are we looking here beyond condiments and the footprint size, and what does current product pipeline look like in this space?
We've got a Hommade brand, and in Hommade we are scaling it up. As you know that we've already rolled out chutney and pickle. You know, for confidentiality reasons, I'll not be able to tell you as to which all categories we'll be getting in. The market is becoming very competitive. I'm sure you appreciate that. We are proposing to scale up the Hommade brand, drastically and increase the brand franchise. As and when we keep launching the brands, you'll come to know. As I attempt with pickles and chutneys is to brand the unbranded foods market which is already there in India. We got a very positive response with pickles and chutneys.
Understood. Can we presume that the growth here can be, you know, largely through an organic or will it be organic growth only and then the foods business specifically?
No, it could be a combination of both organic and inorganic. We are starting off the targets for inorganic, but that's again first half. We are still working on organic entry as well.
Understood. That was helpful. Thanks and wish you a happy Diwali.
Yeah, happy Diwali to you, too. Thanks.
Thank you. The next question is from Jaykumar Doshi from Kotak Securities. Please go ahead.
Hi. Thanks for the opportunity. I've got two or three questions. First one is, you know, over the past 2-3 years, new product launches have started contributing 5% to sales as against maybe 1.5% earlier. During this period, how has your allocation of advertising budgets been between, you know, the mature brand and the new products that you have been launching? If you could throw some color. Essentially the idea of asking question is because both in digital first brands, D2C brands, as well as some of the new categories that you're launching, the requirement for A&P support would be significant. Just want to understand how are you balancing the aspirations of different brand managers.
We are really not launching new brands. We are getting into existing categories through power brands. We've got a power brand architecture of eight power brands, and most of our resources are deployed behind power brands. Like in Réal. Réal is a power brand for us. If we get into drinks, it's an existing category of drinks in addition to nectar, and therefore requirement of advertising is not as much. It is more requirement of distribution and more requirement of bandwidth, which is what we provide. That's how we get management resources. Réal is a INR 1,000 crore brand. If we get into a drinks market, we broaden the addressable market from INR 1,600 crore to around INR 6,000 crore-INR 7,000 crore, and therefore requirement of those advertising resources is not much.
If I'm scaling up a Hommade brand, I was in an onion paste, a garlic paste, a ginger paste. Now I'm getting into chutneys. Yeah, there's a different ad set required, but within the similar ad group, as I keep growing the brand, I have my advertising investments also growing. That's the way. If I'm in home care, the Odomos brand, if I launch a racket, electric racket, I don't have to advertise so much. It's only e-commerce, total advertising that one has to do. Likewise, brand after brand, we do the same thing. If in Amla we launched Amla Almond, it's a flanker brand for us, so it is getting consumed under the Amla franchise for us. That's the way we plan it, wherein it doesn't put too much strain on our cash flows.
Understood. That's helpful. Second question is what is the level of planning that would have gone behind the launches, you know, in case of Dabur Vita, your foray into MFD category and liquid vaporizer. So what are typical product development life cycles and, you know, when would you have started working in that direction from, you know, time, conception to go to market?
I think we've got a gate process for all the NPD. The gate process invariably used to take around two years prior to COVID. In COVID, we've been able to shrink the entire, you know, window of NPD launches, which was two years. Now, in COVID, it used to take us 3-4 months. Now post COVID, it is again taking us almost a year. To tell you, we've been planning for almost a year and a half as far as Dabur Vita is concerned, and now it's seeing the light of the day. It's the case with LVP. Invariably around a year post COVID. Yeah.
Understood. Finally, a quick housekeeping question. You indicated that, you know, July and August were quite good as far as rural demand and growth was concerned. There was a little bit of slowdown in September, and then you indicated that you are hopeful that, you know, with festive season, demand will improve. I'm not really sure whether you made any comment on October month, whether it was better than September or and in line with what you witnessed in July and August. This is with respect to rural demand.
No, we've seen a little, I told you, liquidity pressure from the rural and from the wholesale segment, which we have seen, and it carried on in September and also into October. Hopefully November with the festive season, things should actually get better. There is a pressure on the demand that we guys are seeing, and the Kantar indicative data also alluded to what I'm saying. The recent September data which just come out today is also talking about almost a flat volume growth in the FMCG market as we speak.
Understood. That's very clear. Thank you so much, and best wishes for Diwali.
Thank you very much. Yes, thank you.
Thank you. The next question is on the line of [Rakesh Roy] from InCred. Please go ahead.
Oh, hi, sir. Sir, can you highlight the demand outlook for international markets, rural-wise?
International market.
Yeah.
International markets are doing well for us. I'm not saying they are out of the COVID crisis, and all the markets are doing well for international. Overall, international business has grown by 13.8% constant currency terms. With the largest market, Middle East, North Africa, has grown in constant currency terms by 12.8%. All the countries in the MENA markets have done well. Our Sub-Saharan, which is the Africa market, has grown by 25%. Our Nigeria business, which is a key market in Sub-Saharan, has grown by 21%. Our Namaste business, which is a North America business, and a bit of Sub-Saharan has grown by 16%.
Turkey business, which was a little impacted in the last quarter as we got out of COVID, has been around 3.5% for us. There's been currency depreciation there also. The FAR business has also grown by around 17.6% for us. Overall, international business is in a good space and doing well for us. We would anticipate double-digit growth coming international business if the COVID third wave and any lockdowns don't happen in international markets.
Right, sir. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Abhijeet Kundu from Antique. Please go ahead.
Yeah, hi. Thanks for the opportunity. My first question was on the tax side, two things. For the year, where do we see the effective tax rate? Because in this quarter, tax rate has gone up significantly. For the full year, what should be the tax rate that we have to factor in on a consolidated basis?
I believe on a consolidated basis, you know, we are almost 23%, both at a quarter level and YTD level. We expect it will be in a similar range for the full year, around 23%-23.5%, for full year.
Okay. Two more questions. One question was on, you know, Mohit said that, you know, there has been some issues with, liquidity, you know, tightening of liquidity in the rural markets and, Nielsen has indicated a flat year-on-year, you know, volume growth. In the light of this, how do we see the year ahead? I mean, you know, December and March quarter, I mean, what are your expectations? Because the first half has been really strong despite a very strong base. Now, what are the expectations? Will it be possible to, you know, still grow in double digits on the top-line front?
Yeah. Abhijeet, we've indicated that we've taken a target of double-digit growth for the full year, double-digit volume growth for the full year, and we will maintain our target to do double-digit growth. There is a base hump, which is there in the current quarter, and that we have to circumvent. That is there. Some quarters, one of the quarters could be having a single-digit and other could have a double-digit growth. Overall, for the full year, we'll maintain a double-digit growth rate in India and also in the international business. I think that is what we will do, not because of the macroeconomic, but because of our own efforts and good execution. Yeah.
Okay. Lastly, in oral care, you know, as per our channel checks, there has been some amount of pressure in terms of growth because the competitive activity has gone up. Last year, you know, one of your, the largest players was finding it difficult to reach out to the markets. There was some issue with distribution I heard that. This year there has been heightened competition. You know, for Dabur, what we have seen is, Dabur was growing at a very strong rate in oral care, led by Dabur Red Toothpaste. Is there any, I mean, increase in competition or a slight moderation in growth or, you know, on a high base growth has moderated a bit in oral care. What's the scenario there?
No, I think oral care, we are in a good space. I think we've got a very differentiated proposition, and we are completely unfazed by the competition till now. Our Dabur Red, which is a flagship brand, has grown by 20% in the last quarter also. While we have 15% growth overall for oral care, but that is coming because of a very high base of last year, which grew by around 40%, and that is almost flat in current quarter. Our Red Toothpaste has grown CAGR of over 20%, and this quarter we gained 40 basis points in terms of market share also, and we are steadily increasing.
Now, if you look at the market size, the market segment of herbal, which is around 30%-10%, has actually grown at 1.3x of the non-herbal, where the market leader, which you are saying has got aggressive, that is growing at around 8%-8.5% non-herbal, and the herbal market is growing at around 11%-12%. There's a huge delta between the non-herbal and the herbal market, and Dabur is growing at 1.3x of the herbal market also.
Mm-hmm.
Therefore, from a market share standpoint, we are consistently gaining market share, and it's a matter of time. I think another two quarters, we are 50 basis point behind being a number 2 brand in the country, number 2 company in the country in oral care. I am extremely positive on oral care despite competition going up. The competition is good for us because we've been able to manage competition recently well. I don't think there's so much pressure. Plus, we've got a right to win, and we are the number 1 in herbal, and there's nobody else in herbal. Even if the competitor does herbal offerings, they only add to our tailwind. We become the beneficiaries of that. All the new product initiatives of Dabur Herb'l Clove and herbal ingredients that we've launched are doing well.
Overall, I think we're in a good space as far as the oral care is concerned.
Okay, got it. Congrats on a very good performance, and happily well.
Thank you. Happy new year to you. Thank you.
Thank you. Ladies and gentlemen, this is the last of the question queue. I'll take the last question from the line of Richard Liu from JM Financial. Please go ahead.
Hi. Thanks for taking my question. Mohit, I have two questions. You know, one is, you know, I've noticed some, you know, some announcements in recent times with regards to private placements of NCDs. Just wanted to check what is, you know, what is this regarding, especially since you've got a cash balance of INR 5,000 odd crores.
Yeah. I'll let Mr. Ankush Jain take that question.
It has been placed only to fund the CapEx. As you know that we have recently put up a new plant in Indore, which will be costing over INR 500 crore. In addition to the modernization and expansion, we keep on going for our existing plants in other places like Vadodara, Jammu, Tezpur. Primarily our investment which we have invested for a higher return for a slightly longer period. We were not really in a position to withdraw those monies. Moreover, we have been able to raise this money at a very fine rate. That is why we have resorted to this placement of NCDs.
Okay, understood. Thank you for that. Mohit, you know, the next question to you is really that, you know, if you can walk us through the numerous NPDs that you've been doing since the last year and a half. As in, you know, how have these done in quarters subsequent to the quarter of launch? And if you can just take an example of maybe the best performing NPD and the worst performing NPD. You know, how large they have become since launch and, you know, and how big these can become over time.
Richard, NPD is gonna be the center stage for our strategy, and that's one of the ways how we are trying to grow and which will be the case going forward also. If I take one of the best NPD would be drinks. When we extended Réal Tetra Pak into drinks, and we entered the mango drinks market with INR 10,000 crore, and that's doing well. It's the second year of the launch. Starting from the second year. I think it's the first year going forward. We launched it sometime last year. This year we clocked INR 100 crore in the drinks space. As far as that's the best. The worst will be in terms of sanitizer. During COVID, we launched a sanitizer. We did INR 100 crore of sales in sanitizers in some six months' time.
This year we'll do a sale of maximum INR 7 crore. That's the worst NPD for me. The ones which are medium will be COVID contextual NPDs like Tulsi Drops, Nasal drops, health juices. During the COVID period, they done very well. Now post second wave of COVID, the growth is actually much lower. I will not say that this launch is not doing well. It's a huge market, and we continuously grow. The CAGRs are still in double digits, more than double digits. Going forward, it will sustain as we keep scaling up these NPDs. We've done Apple Cider. One of the better launches that we've done in e-commerce is Apple Cider Vinegar. Apple Cider Vinegar is also doing extremely well. Around INR 1.5 crore of business is which we are clocking every month in that.
Even the baby range that we rolled out in e-commerce is doing a business of around INR 1 crore-INR 1.5 crore on a monthly basis. Overall, I think I would say 80% of our NPDs have done very well. 20%, they have not done so well, but we're okay with it. It is not giving us sleepless nights, it's not done well. I think we'll manage it. We are incorporating a culture, the fearless culture of new NPD into the company. Even if some of them fail, it's all right.
Understood. Got it, Mohit. That's very useful. Thank you. Wish you all the best.
Thank you very much, Richard. Thanks a lot. Yeah.
Thank you. Ladies and gentlemen, that was our last question for today. I now hand the conference over to Ms. Gagan Ahluwalia for closing comments. Thank you, and over to you, ma'am.
Thanks, Shivan. Thank you for your participation, ladies and gentlemen, in this conference call. The webcast, audio recording and transcript will be available on our website by evening. Thank you, and stay safe and healthy. Good day.
Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.