Dabur India Limited (NSE:DABUR)

Q3 20/21

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Jan 29, 2021

Ladies and gentlemen, good day, and welcome to the Q3 Results Investors Conference Call of Dabur India Limited. As a reminder, all participant lines will be in a listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Gagan Alwwalia. Thank you, and over to you, ma'am. Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Daban India Limited, I welcome you to this conference call pertaining to results for the quarter and nine months ended thirty first December twenty twenty. Present here with me are mister Mohit Palossa, chief executive officer, Tabar India Limited mister Nalik Malik, chief financial officer mister Ashok Chen, EVP Finance and Company Secretary and mister Ankur Chen, Vice President Financial Planning and Analysis. I would like to inform you that after more than eight years of long and fruitful association with the company, mister Lalit Malik has decided to pursue his career interests outside of Tata. Mr. Ankush Chen will be taking over as Chief Financial Officer with effect from 04/01/2021. We will now start the conference with an overview of the company's performance by Mr. Mohit Panhotra, followed by a Q and A session. I now request Mohit to start the presentation. Thank you, and over to you. Thank you, Gurgan Madam. Good afternoon, ladies and gentlemen. I hope all of you and your families are staying safe and healthy. Let me also wish you all a very happy New Year and a great year ahead. While the war against COVID continues, the starting of the vaccination program in India and many other countries overseas augurs very well for the whole world. I would like to express my deepest gratitude to the R and D personnel and thousands of scientists across the world who have worked at extraordinary pace to provide this vaccine to the world. I would like to express my gratitude to the entire Dabo family from factories to supply chain and to the frontline sales force who have gone beyond the call of their duty and thank them for their hard work, commitment, and invaluable contributions, which have helped us weather the storm and emerge stronger. They are our true heroes. I also wanna place on record my appreciation for mister Lalit Malik as a chief financial officer of Davar India Limited and thank him for more than eight years of long and fruitful association with Dabur. I also take this opportunity to welcome mister Ankush Jain, who is taking over as the CFO with effect from 2021. Ankush has more than twenty three years of experience in finance and accounts with companies like PwC, GSK, and Carlsberg. I welcome him on board again. The strategic business transformation exercise that I've talked about before continues to drive the growth strategies in the core business areas to successfully address the emerging challenges of COVID and deliver a robust top line growth accompanied by healthy profitability during the quarter. We saw growth of 16% in the consolidated revenue from operations. Our domestic FMCG business recorded a stellar growth of 19.5%, backed by one of the highest volume growth of 18.1%. Operating profit increased by 16.5% and consolidated profit after tax reported a growth of 23.7%. Healthcare portfolio has recorded a growth of 28.1% in quarter three, driven by strong momentum in our power brands in the healthcare portfolio and supported by creative marketing campaign, localized sales activations and sustained investments. Health supplements portfolio grew by 35% led by a robust double digit growth in Chavantras and Honey. OTC business posted a strong growth of 34 on back of robust performance of Honey Tips and Laltil, which was further bolstered by the NPDs of Health Drops, Health Juices and other Ayurvedic products. The Ethical business also performed very well, registering a 23% growth on back of strong demand for immunity boosting products, contextual activation, visibility drives in chemist channel, and initiatives like immunity at doorsteps. Within HPC, our home and personal care, oral care portfolio recorded a massive growth of 28%. Dabur Red, our key brand continued strong growth momentum. Netswak and Babul franchise also recorded a double digit growth. Our market shares in toothpaste category witnessed a 120 basis points gain vis a vis last year. Dabur Lal Dansmanjan also witnessed a very strong growth of 20% during the quarter. Newly launched Dabur Dansrakshak received a very good initial response from the consumers. Hair oil portfolio saw a good recovery with a growth of 12%. We witnessed double digit growth in both perfumed oils and coconut oil portfolio. Our flanker brand strategy remains intact with recently launched Vadama Avla and Amla Aloe Vera, which have seen great traction. We also saw an increase of 20 basis points in the market share in the hair oil category. The shampoo portfolio recorded a growth of 27.1%. Our market share in shampoos continues to see an uptick and increase in market share of 50 basis points to touch 6.5%. Our focus on increasing the bottle saliency is yielding results with a strong surge seen in the quarter. Now the water salience is almost 15% of the business. Watika shampoo reported a strong offtakes on e commerce platforms as well. Home Care reported a muted performance during the quarter due to discretionary nature of the portfolio. The air fresheners and mosquito repellent cream category continues to be under pressure, reporting a high single digit decline as per syndicated data. However, our market shares in both these categories saw an uptick. In air fresheners, Odonil registered an increase of two fourteen basis points in market share. And in mosquito repellent creams, Odemos recorded an improvement of two fifty basis points. Skincare portfolio witnessed a growth of 9% driven by strong growth in fem hand wash portfolio. Gulabari and fem are seeing sequential improvement as mobility and social activity is going up. Even though Horeca and CSD businesses continue to operate at a lower than pre COVID level, the food business reported a growth of 4.7%. Ex Horeca and CSD, the food business registered a growth of 16%. In home consumption has rebounded, while out of home portfolio has shown sequential improvement month on month. Our market share in J and S D category saw an increase of 20 bps. Culinary business under the homemade brand recorded a growth of 16%. Excluding Oreka business, the growth in culinary was 42%. The new products launched under the food portfolio like real mango drink, homemade chutneys and pickle range, and Amla RTD juice continue to see good traction marketplace. Among the channels, ecommerce was an outperformer with growth of 150%. This channel now contributes to around 6% of our business. We were able to capture the increasing preference for online purchases among consumers and increase our market shares on on on e commerce platforms. We have also launched e commerce innovations like baby care portfolio, apple cider vinegar, and cold pressed mustard oil, which are receiving a good response. We continue to drive innovation during the quarter, expanded our honey portfolio with introduction of e commerce Himalayan forest honey and organic honey. We expanded our OTC and ethical portfolio and added Dabur Red Pulling Oil, a traditional Ayurvedic mouthwash to the oral care category. A range of contemporary ingredient based hair oils have also been introduced under the Vartika brand on e commerce. The new products launched in the last three quarters are performing well and have contributed to around 4% to 5% of our revenue. Innovation will continue to be a strong driver of growth for the company and we intend to continue to convert consumer insights into innovative and relevant products for the current time. International business recorded a growth of 14.1% in CC terms during the quarter. MENA region saw a turnaround and posted a double digit CC growth. We saw strong double digit growth in Turkey, SARC and SSA business. The business also reported an increase in operating margin aided by cost saving initiatives. Going forward, we intend to continue to invest strongly behind our brand, distribution infrastructure, digitization and automation, building a robust manufacturing backbone and supply chain. Our focus will remain on capturing growth opportunities in our portfolio, increasing our market shares and drive strong profitable growth in our business. I now open the Q and A and invite your questions. Thank you very much. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. The question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, Mohit and team. Great performance. Couple of things. on the toothpaste oral care side, I mean, if you look at, you know, your numbers as well as your competition numbers, suddenly, we are seeing a double digit growth in the category. You know, all three of you have reported a double digit in the domestic market. So can you just elaborate on what's happening in that given, you know, where the penetration levels are? In your case, of course, there is market share gain. But from an overall market perspective, can you just share your thoughts? Right, Vivek. So what's happening in the category in oral care, I'm quoting now the syndicated numbers to you. The category of oral care has actually grown in value terms by 9% and volume terms by 3%. So there is a price increase driven value growth in the category. That's what we've seen. The herbal and natural category, which almost is 50% now, is growing at the rate of 14% in the category. And, we have gained 120 basis points at the cost of the competition and where the market shares are going down and our market shares are going up. On all the three brands, we, Dread Toothpaste or Misoak or Babul, we've actually gained the market shares sequentially, quarter wise and year on year as well. Sure. Sure. And in the last few quarters, we have seen, you know, very high focus on new launches. So can you share your thoughts on, you know, products that you think have done extremely well and products which, you know, have not met your expectation? Yeah. of all, I'll talk about the products that have not done too well in past six, eight months. I think there is a there was COVID contextual new product launches that you guys did, which was the sanitizers and a hard surface cleaners and some home and hygiene products. So they have not done very well, and the momentum has got lost. Like, sanitizer business in which in the last in the first quarter, they would have done a business of more than around 50 crores, 60 crores. That's almost down to around 2 to 3 crores. So sanitizer business, the total of late winter, profitability has gone down, competitive intensity has gone up, and business surface capacity and the categories become completely commoditized. So there, it's not done well. And related categories around sanitizers have also not moved well. Now I'll move to the brands which are most strategic that we guided. of all, I'll touch on the health care. In health care, we guys rolled out our juices range, which is the new health care juices wherein we add Aloe Vera juice, Giloy juice, Ashwagandha juice, etcetera. They are getting very good traction in the marketplace. We also launched a portfolio health drops, like 2C drops. They are doing exceedingly well. We rolled out our PureHUB range, which is again doing very well in the marketplace. In the HPC portfolio, in aero, we launched a premium variant and we launched Blanca brands, Whether it's Amla, Aloe Vera or it's with Amla, of them are actually doing well. In oral care, we rolled out Dantrakshat in non salient red markets, which is is North, against a very big opportunity, which was existing. That is showing significant traction in the marketplace. And also in South, we rolled out Dabur Herbal toothpaste as we did a test marketing there. So both these initiatives in oral care are doing well. And in addition to that, in the current quarter, we rolled out red cooling oil essentially on ecommerce. So oral care initiative is also doing exceedingly well. Then I'll come to the ecommerce initiatives. We launched cold pressed mustard oil in ecommerce. That's doing very well. Apple cider vinegar, it's doing reasonably well. We launched a range of baby care products there. That's doing well. So most of our ecommerce initiatives are doing, except barring the automotive rackets that we lost in ecommerce, that's not doing very well. Then we are correcting that at the back end here. The entire so ecommerce range that we guys rolled out. Now we've rolled out a range of hair oils and shampoo. That's also doing very well for us. The ethical portfolio that we rolled out in our ethical division is more prescription in nature. All of them are doing reasonably well as we speak. So that's the report card on NPD. The NPD contribution to the business is now around 4% to 5%. YTD is around 6%. Thanks. That was very detailed explanation, Mohit. And if I can ask just one more question, can you just talk about the input cost trends and, you know, your views on gross margins as we go forward? Yeah. So raw materials are firming up. The raw material prices are prices are firming up. And all our basket of so whether it's agribasket or it's a petroleum linked basket or the packaging material or paper, we are seeing firming up of prices happening everywhere. So we are left with no choice but to pass on this kind of an inflation to the consumer because we'll not be able to absorb all this. So you will see calibrated price increases, which will happen across our portfolio. And plus some cost efficiencies being driven from all of the line items that we've already launched Samridhi project. So under the Samridhi project, you'll see the cost saving happening plus reduction of consumer promotions, which will also help us to manage our operating margin. We don't want to dilute our operating margin, so we will try to balance and manage our operating margins by price increases, cost optimization, and also some consumer promotion reduction or if need be some advertising judicious spends. Great. Wishing you and your team all the very best. Thank you. Thank you, Vivek. Thank you very much. Thank you. The next question is from the line of Arnaud Maitra from Credit Suisse. Please go ahead. Yes. Hi, welcome team. Again, congratulations on the consecutive strong quarter. question was on Chawanpash and Honey, where We all know that the fear of COVID is now kind of going down. It probably went down even in the DQ. So from your vantage point, any trends that you are seeing there do you see the, you know, the the consumption level slipping sequentially in October, November, December, January month? Or are you seeing some permanent gains in market share which are not going away despite the fear of the pandemic kind of going away? You could kind of comment on both on pricing separately if the trends are a bit different. Right. So, Adam, the exponential growth that we've seen in the season, as you know, Chanpas and Hari, the season is winters, and we are out of the winter season. So during the season and preseason loading, we did not see any sort of a moderation coming in. As a matter of fact, sequentially, we've seen the improvement in the quantum of sales that was happening month on month, and that's why you see this great set of numbers. But the exponential growth that we've seen may moderate going forward. But I feel the growth will continue on back of the innovation, brand building, investments that we are putting in and brand extensions that we people will be launching. So now coming to market share numbers in Chawan Prash, we've increased our market share by 120 basis points and we're 60% plus market share in the Chawanprash. And the penetration levels of Chawanprash in the country was going up to beyond around 6%. And Chawanprash has got a proven efficacy as a immunity booster. And line with that, we guys did some sort of a clinical trial, and the clinical trial results are out. I can't give you very granular details about the clinical trial. It's already with Ministry of Ayush, and the board ratification by Ministry of Ayush, those findings will be out. And we've seen a significant impact of Chavantras as immunity booster in contraction of COVID and recovery of COVID and the quality of life index. And this entire study has been done in more than around 600 more than 600 respondents as per WHO standards. So that result is out. So I think on back of that, categories should take up a big boost, and it's also been advisory by the government. So I think overall, the pie of seven plus categories should increase. That said, exponential growth will definitely moderate. And we are doing all what it takes to ensure that we are able to go on a path of growth even on the back of innovations that we guys are thinking of launching. Now coming to Honey. Honey also, the exponential growth may not continue, it will moderate. And as the instances of COVID go down, we see the pie contracting in Honey a little bit. Honey penetrations are 24%, twenty five percent in the country. And this bio will contract as we go forward because people will not have as many medicines as they used to have during the COVID times. And honey is used as a adjuvant to increase the efficacy in these medicines and prescribed by the Vedya. So that instance will go down. That said, we are launching huge innovations, and the the category is also becoming significantly competitive. And on back of completion, increasing share of voice, the you know, as the share of voice increases, more and more consumers might just get in, and we will be working on the path to increase our market share. As we speak, we've increased market share by 700 basis points in Honey, whether it's ecommerce or modern trade or general trade across channels. So we have not seen any sort of contraction in these quarters, and we would want to maintain if not that exponential growth, but at least the growth should get maintained. Thanks. That was for the very detailed reply, Mohit. The question was, you know, on the some of the new launches which you made, which is basically some edible oils, which is the cold pressed mustard oil and also ghee, which we read in the media. So just wanted to understand because the total category sizes here are very large. Do you want me to be a very small niche player in ecommerce and these kind of segments? Or in the medium term, do you actually want to get a sizable turnover? Because in these categories, even small shares can get large revenue contributions. So just wanted to hear your thought process, sir. No. So we are a health care player. Adam, as you know, we don't want to become a edible oil player, which plays in the mainstream of these categories. We want to play in the value added segment of these market. As you know, the market segments are very large. Even the value added segment is very large. So at the moment, we'll restrict ourselves to e commerce. We will see how the traction on e commerce is, which I told you, it's very good. And then gradually and slowly percolate these into modern trade. We are in no hurry to get a 100 crore or 200 crore out of these categories because it could be margin dilutive also if we end doing that. So we'll be having a very calibrated approach and a watchful approach to extend this to mainstream. Okay. Thanks so much, Mohit, and all the best. Yes. Thank you. Thank you, Anubh. Yes. Thank you. The next question is from the line of Avnish Rai from Edelweiss. Please go ahead. Yes, sir. Thanks. Congrats on extremely good sort of numbers. My question is e commerce versus modern trade for you. So e commerce share has gone up, but now with modern trade also seeing good growth coming back and people going to malls also significantly. How do you see the market share or percentage share of your revenue between this in the near term? Do you see ecommerce coming down or, structurally, ecommerce will keep going up and in some years, maybe ecommerce will become bigger than modern day. So, Arneesh, thank you. So we see ecommerce structurally becoming bigger as a channel where the consumers are inclined to do their purchases as a contactless sort of a purchase behavior, a behavior which is skewed most towards urban consumers and also the millennial consumers. And this habit is actually percolating from a very top end urban to urban and gradually, slowly will go on to semi urban also. So structurally, we'll see ecommerce as a business will only grow. Ecommerce will also I would not say eat into it, but ecommerce will also have a positive rub off effect on modern trade because modern trade also has ecommerce portals like Reliance. We'll also have a reliance.com. Geomart has come in. So the modern trade chains will also gradually slowly pivot towards the purchase on ecommerce. So we are trying to be a mover there and capture that also. And b to b ecommerce is also catching up. So that also all ends of ecommerce, if you ask me, will only structurally become bigger and larger and will eat into the GT shares as we speak. And modern trade coming back into normalcy now after two quarters of contraction, we'll see even modern trade gaining shares. So overall, ecommerce and modern trade and cash and carry will become much and much larger. And we as an organization will be trying to be the ones to launch brands, which exclusively meant for all these three channels. We are trying to create organization structure, which is geared towards these channels, and we'll also increase our share of shelf and all the parameters will get strengthened in all these three channels for us. Finally, next question is on toothpaste. So this 120 bps improvement in market share, is it primarily against Patanjali or even against the top two? you gave us your data that now Javantrash penetration is 6%. So my question was, in terms of frequency of toothpaste consumption, now versus, say, two years or three years back, is there a significant improvement because of focus on hygiene, because of the corona? Because growth rates is improving for everyone, and let us forget the Nielsen number. Just the listed company number does show that there's a significant pickup in the volume growth ex of the price growth also. Right. So, Abhish, of all, in terms of market shares, the one twenty bps, which will be gained, but Anjali has also gained. So as I alluded to earlier in Vivek's question, that the herbal category has seen a 2x growth as compared to the non herbal category. So if the entire category grew by around 7% in value, there was a 14% growth which is coming out of the herbal category. And the beneficiary of herbal category growth rate are Patanjali and Dabur and a couple of small players here. So I think the market share gain is coming at the cost of the other players and not in addition to the other players. The category penetrations are already 90% odd. So I don't think COVID has really acted as to increase the frequency of brushing of the oral care category. I would not think so. So I think it's at the cost of the market leader that we would have gained market shares here. And Patanjali and other herbal players penetration would have gone up as compared to the lead player. Next question is on Honey. So in the past, we have seen premium Honey in India hasn't seen much of success by other players. So you launched Himalaya, Forest Honey, and Organic Honey. So what is the thought process? Is it more to get some niche audience here in the ecommerce or maybe even modern trade? the edible oil company just come here. It has a target of 100 core for next year in honey. So what would be your thoughts? Will it be just expansion or category because of new players, especially given the recent controversy, recent issue which happened wherein that company was well placed from a German machine testing. So if you could tell us how do you see that and the next year's INR100 crores impact on the category? See, as far as we are concerned, are market leaders in Hani. As I told you that we've notched up around 700 basis points in Hani, we will be working on a trajectory to increase our market shares and strengthening our position in the marketplace. And as a part of strengthening the position in the marketplace, a, strengthening the existing brand plus launching premiumized variants. Therefore, Organic Honey, Forest Honey and Ashwagandha honey and Tulsi honey that we rolled out in GT also. That's all attempt to pivot our honey towards value added segments and not just be dependent on a commodity market, which is what Honey is and keep talking about purity. So we are trying to value add our Honey and are moving into different verticals, are more value added of Honey, and we'll be focused on gaining market share. If some other player comes in, it's actually a welcome thing for the industry and for us because he will only increase the pie as the share of voice actually goes up. As far as some German test is concerned, we are here to abide by the law of the land, which is the FSSCI standards, which have been laid up. If somebody comes and talks about in Nigeria, there is some testing, and I'm launching that in India. So I don't think people will sway towards that or something made in USA or Australia or it has to be because Indian honey is collected from the Indian beekeepers, and Indian beekeepers collect the honey from 20,000 varieties of flowers, which are grown in India and not grown in Germany. And the flora of German land of the different monsoon and fertilizers and soil is completely different to what is in India. So FSCI in the clarification given to the CST report very clearly said that FSCI has the most stringent standard in the whole world, and NMR is nowhere a standard in anywhere in the world. Even in Germany, that is not a standard because there is no robo database. So this machine relies on what the database is and the testing done in accordance to the database. It's a it's a print of the database, which it checks the sample again. So if the database is not Indian, it will not check against India. So therefore, one would not like to comment too much upon what the competitor is doing, but be focused on one's own journey of strengthening our own stay in honey and also launching value added things and increasing the penetration of honey as a market leader. And for us, Pagani happened in the past also. And if a nuclear comes and takes away one or two points, it's okay as long as any category is expanding. And as a market leader, we'll be beneficiaries of that tailwind, which will come to expand the category. And what is the category size now based on the exit front? We are almost around 40 within market share. So I think it's around 1,500 odd crores. K. Mohit, last question. So beverages, when I see cola companies, they are seeing very good growth in the past two quarters also. You have seen very tough last two years. Some growth has come back. So is the price value equation now good enough? Because I see, again, very high discounting in the industry in the food uses coming back. how is the 10 rupee price point done? And are you now confident that without the base effect, also growth can come back? Base is very favorable, so growth will come back. But are the structural issues behind? Right. So I think I would say the structural issues are already behind. If I I think the business the way the business has actually performed, while the growth is 4.7%, if I take out the Oreca business and the institutional business, the business has actually grown by around 6% for us. Now six to 8% is what the beverage growth has been. And but Colas coming back, I think it's momentary. There's a health care power trade, which is getting established. So Oolaz will always become a source of business for the juice category and the drinks category. And I think the drinks category only pick up a 10 rupee price point that we rolled out in Cooler and Apple Mini have done exceedingly well in the market and our foray into the bottle, our PET bottle has also been received very well in the marketplace. So our movement to the drinks category, I think, is very positive and should be positive for the coming quarter, which is going to be the season quarter for us in real. I am very optimistic on back of all the NPEs and innovation that the people are doing in beverages that our business should turn around. And structurally, this business should only improve going forward. And like you rightly alluded to is that the base is going to be favorable here. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi. Thanks for the opportunity and congrats on good set of numbers. The traditional understanding on premiumization was that GP as a channel is less experimental and hence Modern Trade was right channel to launch premium products as the format allows consumers to sample premium products. But now we are seeing for last one year that even increased players like us are launching premium products on online platform alone. So is there any insight that online consumer has become much more experimental with premium products on online and they are okay with without trials or touch and feel premiumizing on that platform? TJ, I think premiumization has always been the game on ecommerce. Ecommerce itself was very small. So as ecommerce is picking up, we are seeing more and more players, and that is becoming more visible to us. But I think ecommerce was always a cradle for launching premium products. If you see a lot of companies who could not afford to launch products in GT because go to market itself is very expensive. One of one of them, they always chose e commerce as a cradle of launching their brands. So we've got repeat examples in personal care, in garments, etcetera, where the e commerce exclusive brands are not present in modern trade or in GT also. So now what's happened is the mainstream companies just also started choosing e commerce as a label for new product launches. And as and when they do well, they will roll it out in modern trade and GT. They have a wherewithal to launch it in GT. For example, Laval could have launched in GT or other products in GT, but the cost of failure is quite high in GT as compared to in e commerce, where you can target very sharply to the millennial consumer. You can sell products on a limited platform, and there is no question of taking the sales back. So all around, it's all positive, launch products in e commerce and continuously keep improving. So as I keep telling that progression is the way to go than perfection, then you can quickly test the products on ecommerce rather than doing a, you know, test marketing and spending one full year in doing test marketing. It's better to keep improving your mixes when you launch in ecommerce. Hello? Hello? Hello? It Krishna? Hello? Yeah. Yeah. Is the cost of creating customer revenue also lower on that platform? Much lower. Much lower as compared to general trade because you are able to very sharply target the e commerce consumer on platform and on social. Sure. Mohit, we also announced today a subsidiary So if you can share some detail, is it a fresh initiative, or it will be just recalibrating our business existing business there? Sure. So what we have seen is that, you know, there is an opportunity for us to have exports from India. This is in addition to the international companies having business outside India. So in order to promote the exports, we are setting up a separate subsidiary, which is 100% subsidiary of Tapper India Limited, which will manufacture the products in India and export to the markets like US, etcetera. So that is going to be the focus, which we will do it in a separate subsidiary there. For that reason, we are forming a legal entity. And just to add to Lalit's point, with COVID happening, you know, health care demand in the overseas markets have really gone up. And to provide a focus, this subsidiary is being formed. Right. And with China having an issue, this could be an opportunity for India to, improve our exports. Sure. So this will be white label, or this will be on under our brand only? It could be white label and also our brand. Both. Okay. And lastly, we were running with a target of some 1,400,000 directories by the end of the year. So where are we on that number? Right. So we are pretty much on track as far as, our direct reach numbers are concerned, Pages. So we were 1,200,000. As we speak, we already see. By end of the year, we should reach up to around 1,400,000, our direct reach in, the GT business. Thanks. Best wishes and hope you continue the good performance. Thank you. Thank you, Deepish. Thank you. The next question is from the line of Aditya Souman from Goldman Sachs. Please go ahead. Hi. Good evening, Mohit and team, and congrats on great numbers. So firstly, on oral care, so in the past two quarters, we've seen this sort of step up in overall revenue. So I think overall revenues for seven quarters before that were around $2.50 to $2.70 crores. Now that's jumped to about 330 crores. Can you explain a little more detail what this step jump has been? Yeah. So, Aditha, oral care, right, I think oral care, one of the categories, we're not so much impacted by COVID for us. So I think pre COVID to now, not much of the difference has been made except that the other two brands also, which is Misswag, Babul, LDM, all the three have also started firing in addition to the Redwood Paste. Redwood is obviously our flagship brand is doing very well. And our overall market share has gone up by 120 So I think and also regionally, we have put up rise as this whole structural change, which is regional insight capturing. So we are making regional creatives for everything and focusing on regional GTM and regional manpower is being created. So I think all that is now coming to pay us rich dividend that we have stolen. And that's why you see this growth happening in oral care of all the brands. So be it Baboole or Miswak or, Laladat, Manjun, and, Red Toothpaste. And we've also launched two more brands, which is Adantrakshak and Glow, and we'll continue on the trajectory of launching more innovations, which are already in the pipeline for us. And now Red Bulling Oil has also got rolled out in the marketplace. Understand. And in this step up, right, I mean, $3.30 crores, let's say, about $2.60 crores, what would be the contribution of Red versus the other brand? The RED contribution, I think, should be more around 70% of the total portfolio, and 30% would be others. So understand that. By 30% for us, and other portfolio has grown by around 20%, 25%. Overall growth being around 28% for us. Thanks. That's clear. And question on Digestive. I mean, for most of the other businesses, we've seen that step up, say, health supplements or or oral care. But Digestive is sort of steady around that 95 crores to 200 crores. So what do you think would be the next steps to take that to the next level? Right. So I think a very good question. I think our Digestive portfolio has been flat in this year, essentially single brand Hajmulla. Hajmulla is very salient. In last full year, Hajmulla pre COVID had really grown. But post COVID, what happened is out of home consumption going down. The impulse purchase SQ for Hajmulla, which is Saatche, which has gone declined by around 15% for us because it was basically consumed by kids, and kids have stopped going to school and school has shut. And, therefore, that portfolio has got impacted. But the other part of the portfolio, which is bottled, which is only contributing to around 25% of the portfolio, it's grown by 15%. So in home consumption of Hajjmulla is growing at 15%. Out of homes, the majority consumption is what is declining by around 15%. But going forward, we have great plans in Ajmulla, and Ajmulla was one of the contenders of being a power brand in the company, but for this COVID situation, I think so we are launching multiple other SKUs in Ajmulla. We rolled out Chakkula last year. Now we are coming out with multiple very interesting other SKUs, and Ardhula has a potential of getting getting extended into a lot of other impulse purchase categories in in the and others. So we are still working on a strategy. As we speak, we are working on a budget, and we will be working on plans to extend Hajbola into larger categories as we speak. Like, there's a lot of cottage industry, which is prevailing in India, whether it's around Ladus or in the Ladus, etcetera, which is in line with what the Hajmola brand core is all about. So there's huge potential here in Ajmulla, we are cognizant, and we are working towards that. Got it. Yeah. And and just on Ajmulla, have you seen any sequential improvement in the out of home, let's say, from October to December? Yes. We are. So it was minus 50%, but I think sequential recovery now is minus 15%. I think it's a matter of time. In the first quarter, we think it should divide as the schools open. Schools are still shut, but I think the schools open in the month of February or March, our Gola session should revive on back of school opening. Got it. Very clear. Thanks. Thank you. The next question is from the line of Suresh Pardeshi from Centrum. Please go ahead. Hi, Mohit. Good evening, and my heartiest congratulations to you an entire time. I I we will definitely miss mister Lalit going forward. But I have few questions. I think Those are the questions. Yeah. Yeah. No. I would I would definitely miss more. So I think most of the questions have been asked, and my friends has taken a lead asking so many questions on oral care, and let let me not trouble you more. Just wanted to understand the structural fundamental changes happening in oral care. Is that I mean, sometime back, we were saying that whites is moving to nonwhites and naturals, which is a color toothpaste phenomenon, which is happening. And that has been prevailing, and that's a very sticky thing. I just wanted to understand and dissect your growth. The 28% is a superb growth. But is it that we have got a benefit of new product pipeline filling and somewhere we are now trying to use operation rise to fill in the rural consumers and wholesale channels? No. I think this is more structural than just pipeline filling. While pipeline fill is happening, that could be an extent to around, you know, four, five As I told you, NPD ratio in Oral Care will only be in the range of around 4% to 5% for us, not beyond that. Rest of the growth has been contributed by the intrinsic strength of the brands and the structural trend in the category, which is a movement from whites to the value added segment. Because unlike other places, here, the value added segment, which is a nonwhite segment, is little cheaper or the same price as the white segment. So there is no reason for why consumer will stick to white. There will be all the reason if the share of voice is there. The compelling reason is that consumer will definitely switch out from white to a more value added segment if that's why you find a market leader also trying to flank itself onto more value added offering. And therefore, the share of voice even by the market leader and by others is only increasing towards the value added segment. So I think there is a strong tailwind and enduring tailwind towards the nonwhite, and this pie will keep increasing. And as I alluded to one of the meetings, the macro clients will become 50% also and the nonwhite segment. And the other players for whom the nonwhite is the lead spearhead will be the one who will be beneficiaries of this game. Okay. Because I've seen having worked out in the South countries, I've seen this benefit of nonwhite. But, anyway, it's now panning out to India in your favor. My next question is And and just to add here, Shreedhar, that we see the same trend panning in Middle East. Middle East also, we are the leaders in in a herbal space, and there also we find and the non herbal space is the market leader. We find our oral care business doing exceedingly well. And, also, this is the same thing that happened in Nigeria. And country after country, we are witnessing our oral care, herbal play catching up. Exactly. That's what my past experience. But, anyway, you are confirming that market is shifting. That's a good news for us. My question is on the health care now forms almost 44% of our business. And I mean, congratulations to you from doubling that business over the last two, three years. But I tend to believe health care has a higher gross margin and profile, but it's not reflecting to in our margin setup. Is that can expect maybe another two, three quarters margin margin trajectory will improve? No. See, I don't think so. The margin trajectory will improve because we are embarking on a huge inflation, which is staring at us, and it's in the range of around 5% to 6%, and we have no other option but to pass on that inflation to the consumer. And if it's passed on, then there will be a pressure on that volume gain volume pressure coming in. While the health care portfolio is margin accretive to the overall portfolio, there's been a huge inflation in the herbs and spices, whether it's amla or it's honey or it is other spices that go into Chavantras. As the demand has picked up, cost of the raw materials have also picked up for us. And raw material is a very significant contribution to the health care cost of production for us. But that said, the health care business will keep trending up for us, and we hope so. And and by virtue of this, the margins will keep increasing from a gross margin perspective. But we are also embarking on so many innovations in health care. And to back up those innovations, we are investing a lot of money. For advertising, expense have also gone up by around 38%. Actually, in media, it's gone up around 40% plus for us. So we've invested ahead of the curve in seeding the new brand, and on back of which, the margins are only stable here. We don't see the expansion flow down from gross margin to the operating margin because advertising expenses are eating that margin upside. Do you think a health care business over next three years would settle 50%? I think it's very difficult to say as we established a base of, very high exponential growth. And, as we go around next year, this, exponential growth will definitely moderate. And but the intent is to take it up to that level definitely. But this was also a high season quarter when winter centric products have a very higher contribution historically as well. So probably it will settle looking over in the full year context. Okay. Just last question, Mohit, from my side. Since the time you have come in, you have harped on performance improvement, progressive growth, new product launches, and you have actually undone, the previous time. Do do you think, this focus on strategy, is three, but growth is important? Is that the strategy you want to follow next two, three years? Or you will also focus on the profitability and delivering margins or bottom line? I see there is a balance between the two things. So I would say the margins and the top line growth are rebalanced with each other, and that's the art in this science of managing the business. So I think that's what we are trying to do to balance both margins and also top line. So whenever the commodity prices are little benign, we are investing that upside on the brand building. And when there will be a pressure, we will try to cut back. Like in the first quarter, you saw that we cut back on advertising expenses. And therefore, we managed our margins or at least managed to curtail the losses which happened in some segments of the business. But we are embarking on the strategy that we had created in the beginning of our vision period, which is all about power brand, all about localization and e commerce, modern trade being fast on creating independent, autonomous verticals, decentralization of authority and reducing span of control and working on cost optimization. All those legs of strategy are still working well for us. And we have not done any course correction in the way the strategy is being run-in the company. I think this is the the the results are actually the output of the strategy that we seeded in the beginning of our revision period. So the reason why I'm asking if you can give me some understanding on the ad spend, how much we should build in for this year, next year, and the following year? I mean, broad number. Our ad group ratio, the media ratio at the moment is roughly around 10% or that we are spending on the business. But our wish list our wish would be to go up to around 11 and a half to 12%. That's where Unilever is. That's the best in class that we want to benchmark. But difficult against the nine through a block as you go on. So if the inflationary pressures are there, then you can't do that much. But if the prices are benign and gross margins go up, then you can afford to take up the hydro. So that's the balance that we have to account as we go along. Sure. And YTD hydro number is around 9%, so probably around that. It will stay around a little higher than that. Can we go around Shree, sorry. There's a long line. So we'll No. No. Thank you. All the best. The next question. Thank you, Suresh. Thank you. The next question is from the line of Krishnan Sambamorti from Motilal Oswald. Please go ahead. Yeah. Thanks for taking my question, and congrats on a great set of numbers. With India interaction with investors and analysts about a year and a half ago, as well as India and I know what you had highlighted that for Dabur to grow, targeting and reaching millennials is an important pillar. Terms of cultural changes, in terms of personal changes, in terms of product changes, as well as channel, I you indicated ecommerce as an important factor here. What has been the initiative so far, and how how how satisfied are you with these assets instead? Right. I think, of all, satisfaction index is very low for me, but we have been trending in the right direction. So ecommerce, we've been able to create a vertical completely and give complete autonomy to them to run. That's why you saw ecommerce percentage steadily has gone up from 1%, 1.5% around 2%, three two years back, and now that it became 3% and now it's 6%. And month on month, e commerce as a percentage is going up. We have started created all hero images. We staged up our brands on e commerce. Now we are available. We created our double separate ecom channel. We have still a lot of room to cover on our website or social media. Digital investments have also gone up from factory around 5% to now 20% as we people speak. Premiumization across our categories is happening. In hair oils, you've just seen some premiumization happening now, and we're in we launched ecommerce for the hair oils. We've launched ecommerce for shampoos. We are still not launched ecommerce for toothpaste. So they will all become future growth drivers for us. So across category, health care, a lot of work has to happen still on ecommerce and also on the food category. So we are lagging behind in terms of where what we would aspire and where we are right now. But, absolutely, I don't think there's any way out but to connect with the millennials, and we have to connect with the millennials because they are the ones who are gonna be the flag bearer of future Jabber. And, that's the way we'd be able to bring Ayurveda, Garga, that we take Garga, Ayurveda is our vision. So we'll only have to start with that, youngster. And if they are able to relate with Ayurveda, will we be able to take Ayurveda mainstream? And that's the vision of the company. So we are working towards it, but, not to our best of, you know, wish. Thanks, Mohit. Can I also squeeze in a question on, the cost savings target that you had initially highlighted, 80 to INR 100 crores for the year? How much is it? How much is sustainable and targets going forward? Yeah. This is all cost saving. We already identified projects which are, worth, what you're saying, around 150 odd crores. And annualized this year, we should be getting roughly around INR 50 crores out of this project and rest will accrue in next year going forward. So and some of project is going on very well and we are continuously monitoring the project updates here and it's running across cost optimization in our formulations to our packaging cost, to our, you know, freight cost, to variable cost, fixed cost across the board in the organization and also overheads and span of control. So that project is underway. And to do project management, we are working with a consultant on the team so that we are able to monitor it from an external party. Yes. Thanks, Rod. Very useful. Thank you. Thank you. The next question is from the line of Prasad Deshma from Bank of America. Please go ahead. Hi, Mohit and team. Congratulations on a good quarter. Prasad, can you be a bit loud, please? Yes. So one question on this export subsidiary. Just wanted to understand, is this specifically for Ayurvedic products? Or is it like overall health care? And could you give sense of the size of this opportunity? I think it is not just restricted to Ayurvedic. It is going to be across all categories. And right now, as I just mentioned, that considering the China disadvantage, we see there is a big opportunity to that. So we are drawing up our strategy, but we do want to have a focused efforts put on that to improve the exports. So therefore, we are going to look at the opportunity there. So it's difficult to say what size that we are looking at, but we certainly are looking at a good opportunity going forward. And we are in the pipeline with some of the good contacts contracts to be achieved, and we will see as we progress. But, yes, I think to to answer your question, it is across all categories, not just for ICT. Okay. So just a follow-up there then. Given the clinical trial data is now available, as you said, for many Ayurvedic products now, does this open up a possibility of, you know, registering these products abroad, like, say, medicines? Or all these are or is this all going to be an OTC kind of a business? At the moment, it's not all these products are actually OTC because despite the clinical data available, there is a huge regulatory barrier for us to register the Ayurvedic brand because clinical data is on the efficacy of the product, how it's performing, but registration of the Ayurvedic products in overseas market requires understanding of the raw material which goes and the efficacy of those individual raw materials, which is a very tall task. So at the moment, we are exporting them as food supplements and as OTC products. Got it. And not as prescription. Got it. Got it. Thanks a lot and all the best. Yeah. Thank you, sir. Thank you. The next question is from the line of Alok Shah from Ambit Capital. Please go ahead. Hello, Moita and team, and congratulations on a stellar performance yet again. My question was essentially on the supply chain and the distribution. Considering a slew of new launches that Dabra has done over the last six to eight months, are we trying to make some strategic changes to the existing supply chains, you think that the current supply chain and distribution that is there? And this is largely towards the GT and and modern trade. Are pretty open to accepting all the new launches and, you know, it is working seamlessly. Thank you. Right. So our supply chain infrastructure is very well geared to handle this. As a matter of fact, we are consolidating a lot of warehouses and account of consolidation of warehouses. We are getting a lot of saving is what we're doing. We used have around 36 odd warehouses. Now we are operating with around 29, 25 warehouses. So we have rationalized a lot of warehouses post GST implementations. That's working well. As far as distribution is concerned, yes, you're right. The bandwidth is limited of the stock is going to sell so many NPDs that we have rolled out. So therefore, what we've done is in some markets, you've tried the line split. So we have three lines working at the moment. One is the HPC, HC and foods line. In some markets, we split the HPC line into two parts. One is oral care driven, another is aerogel driven, and we are testing out the market with that so that additional burden is not there. And to improve the efficacy of the last mile, we are also digitally enable enabling them with a lot of new software digitally available on their handheld terminals, which will be a aid for them to sell newer number of categories, newer number of SKUs, and optimize their sales cost in terms of the time spent that they're spending there. So I think there's a little tweak, which is actually happening in a GTM model also. Got it. Got it. And and just add to that, would there be a cross pollination opportunity significantly for you to push, you know, the new products into the channels which were earlier only towards the health care focused and and, know, vice versa? Absolutely. Yes. Because the reach of our ethical portfolio is really limited in terms of chemist outlook. We only reach out to around 70,000 chemist outlet as compared to our OTC reach, which is two lakh 75,000. So cross pollination helps. And during COVID time, we have actually done cross pollination. So the health care products, as we wanted to extend, a lot of, foods teams are selling, health care because food wasn't selling. And personal care team also sold a lot of sanitizers, etcetera. So there is a cross pollination opportunity, and we leveraged that opportunity also during COVID. That said, but the three main lines will remain, and some cross pollination will happen across the board. The next question is from the line of Latika Chopra from JPMorgan. Please go ahead. Yes. Hi, Mohit. Sorry, I got dropped off. I'm not sure if this was asked already. The question the question is on the overseas business. How confident are you on sustainable recovery for this piece? And any thoughts on for the scope of margin improvement for overseas? And the bit was a bit of clarification on this export subsidy. Would this entail the food products ready to eat, ready to cook, honey ghee? Just asking more from a PLI perspective, if you could share some thoughts and any CapEx that you have in mind for this? Right. So yes, Natika, we saw you, and then you were dropped off. Then we went there that all your questions have been answered. But, thank you for coming in. And the question on international business. So I think all the markets with the exception of one or two markets in international business, have kind of turned around after the COVID impact in quarter one and also in quarter two. So most of the markets are doing well. Overall, constant currency growth that you've seen is around 14%. So I'll talk about Spark. Nepal business and Bangladesh, which is trending well, and I think the growth is sustainable. They've grown by 13% and around 17% respectively for Nepal and Bangladesh. And Dubai based MENA region is also doing well now post the COVID impact. And we think for multiple quarters now, we enter the low base. So that business should also do well. Our U. S. Business and Sub Sahara business is trending well and so is the Egypt business doing well. Turkey business in constant currency has grown by 33%, but because of the LIDAR depreciating, we didn't realize much. But intrinsically, the business is doing pretty well. So I think even on the margin front, there will be a potential of operating leverage in international business on top of the on back of MENA business coming out. So I think, overall, we are in a good space as far as international business is concerned. On the export piece, the subsidiary is essentially to provide some focus on the exports and, nothing beyond, that. So it's a minor structural change that we're doing in the company because of so many units we operate, almost 12 units, and export and private label for us has really grown. So we are just trying to provide a more focus by having a separate, sort of a unit operating for exports here. Any CapEx, Mohit, you have in mind for this? Yeah. I think we are evaluating the possibilities because currently, we do have a a production capacity available. But going forward, we will be requiring the additional capacity expansion. At that point in time, we will look for CapEx also. Sure. Sure. Thank you. Thank you. Yeah. And just to add to Larek's point, and CapEx will be more in domestic business also that we'll be investing in, but which will be not unduly high that will in line with the CapEx of this year. We may look at expanding, augmenting our health care capacities, which are kind of running short and we'll need more civil space, so we might look at additional plants coming in in Central India. But I think the plan will get tangibly close in the budgeting where the exercise is on for that. So this will be in FY 'twenty two, is it, the CapEx for the new Yes. So yes. The next question is from the line of Shruti Jore from TriVantage Capital. Please go ahead. Hi, thank you so much for taking my question. I just had a quick question on so in December, I remember reading some reports about, like, honey being adulterated and things like that. I know you, released a statement about that. I was just wondering if that had any impact on your honey sales. Suvi, we've not seen any impact tangibly come in on the thing. For the sometime, we were number one selling Honey on ecommerce. We lost the gated web position from number one to number two, but we are again back to the number one slot. And we've gained around 700 basis points of market share in Honey across the board across channels. So we've not seen a very significant impact happening on Honey. So yeah. Alright. Thank you so much. That was all from me. Thank you, Subhi. Yeah. Thank you. The next question is from the line of Varun Singh from IDBI Capital. Please go ahead. Yeah. Thank you. Sir, just wanted to understand in terms of You are not clearly audible, Bharat. Can you please please use the answer? Am I audible now? Sir, so just wanted to understand on new launches, sir. What's your thought process in terms of, you know, how do we select a category for going new launches? If you can share some thought on that, Mohit? Right. So the we have a proper new product development model that we select. So category selection happens on the size of the category. The size of the category has to be big enough. The capability should be there in the organization to give a good product in that category, and we should have a right to win in terms of proposition to cut clutter in the category. And there should be opportunity that we see in the category. So only then do we get into the category. So categories are decided based on different platforms. There could be opportunities in ecommerce or modern trade in GT and rural, etcetera, and we've embarked upon the rise regional insights. So we capture the insights from the different regions and then map out the sizes of those categories and attractiveness in terms of our right to win and market share gain and profitability, etcetera, before deciding on. And how are the new launches tracking Moi? For example, mustard oil, launched and we launched even the childcare, etcetera, product. So any commentary on that? Yeah. So they are ecommerce brand launches, Varun, and they've got a very good traction in the market place on ecommerce. So we still not rule them out into GT or to modern trade. So they are being restricted to ecommerce. On ecommerce, we got great reviews from the consumers, and the business is also trending well there. Okay, sure. Thank you very much. Thank you. You. The next question is from the line of Kunal Vaidya from Dallal and Brocha. Please go ahead. Yes, sir. Thanks for the opportunity. So I just had a question in terms of your channel inventory and specifically in terms of your hair care portfolio, just wanted to understand what led to this top line growth in in terms of the volume on a year on year basis. Right. of all, channel inventory, I think the business is becoming, more and more hygienic, if I may say so. The channel inventory is now it was sitting at around twenty one days. From twenty one days, our inventories are down to around thirteen days. And both in power plants and other brands, we've seen inventories getting corrected and we just released the cash in the hands of the distributor, and therefore, they're able to buy more and make more money. So I think the whole business is becoming more hygienic. In terms of health care, all the three pillars are doing well for us. Be it perfumed oils, coconut oils or shampoos, all the three are doing well and we've gained market share in all the three in hair care. And overall, we've gained 12% in our hair oils portfolio and shampoo business has gone up by around 28% and driven by a lot of sales in bottles on back of ecommerce and modern trade, showing up. Sakharan, how much of this you would consider as exponential growth in case of hair care? I don't think this is exponential growth. This is actually the recovery, which has actually happened earlier. This is more discretionary part of the portfolio, which is impacted by COVID. As the COVID instances go down and consumer demand is now also moving towards this recently, this portfolio is coming back to its pre COVID levels. Actually, a little ahead of the pre COVID levels, but there's nothing exponentially here if you ask me. It's pretty structured growth that we are seeing here in hair oils and shampoos. Okay. You. Thank you. Thank you. The next question is from the line of Rahul Maheshwari from Ambit AMC. Please go ahead. Hello. Am I audible? Hello? Yes, you're audible, sir. Yes. of all, congrats, Mohit and team, for going strong quarter on quarter. My question is on as you mentioned that you're diversifying your portfolio in new categories, can you give some highlights where is the categories where you are not deploying the capital or you are getting discontinuing that categories or the product segment? And what are the new learnings that you got in those categories or product segments? So the new categories that we are entering is so I think, good question, Rahul, because once COVID, came in our lives and, we got into thinking again that, are we in the right kind of categories? And therefore, that is the time when we said that we need to get into categories and sustain or endure our existence during a black swan event like a COVID if it ever hits us again. So that was a rethink which happened in the company. And therefore, we decided to get into a more stable state categories like, we've gone into baby care, we've gone into edible oil, we're getting into better, skincare, and, a lot of health care also categories came in. So that was a rethink, and that's why we have launched these categories in also, we went into sanitizer, which is more of a opportunistic play. At that time, only we knew it was tactical and opportunistic to capitalize on the COVID situation, and that's what was survival at that time when we did round 80 odd growth during the time of COVID. And so the learning is that the sanitizing category in hard service, even more contextual categories are will be rationalized and we will cutting out we'll be cutting out the tail of the SKUs that are not making profit or which are not selling as far as the sanitizing and home and hygiene categories are concerned. Health care, personal care, food are most strategic in nature, and with the return to our power band architecture, they'll be retained and they'll be sustained over a period of time. And time investments will be spent on that, and we will shore up those and, scale up those categories. Ma'am, my basic question was, you are doing good of adding the capacity, but any specific product where you are not deploying the capital or you are trying to discontinue that category And after that, out of same two products doesn't go as well. So only thing comes to our vanity sanitizers, we may get out of. And not that we deploy some of the investment behind sanitizer, it was too opportunistic. Correct? Nothing else that we are structurally getting out of and getting into something. We are not discontinuing anything else. Okay. And my question was just on a as you are created one strategy for export oriented where you would be producing in a domestic and you would be exporting, so how you will be taking care of the currency tailwind? Mean, in case if the same exports goes to MENA or Latin America and the the way the currency is behaving, or it's too early to comment? I think, generally, all our exports are in US dollars. So therefore, you know and specifically, we are targeting US mainly and, of course, other countries in Europe. But so therefore, I think all our exports are going to be in US dollars, and plus we also ensure that we get the advance so that we do not have any exposure or or based on LC. So that's the process we'll continue to follow. So we don't see any risk on currency because dollars is generally paid higher when we compare with rupee. And we also take our hedging as a regular policy. So therefore, we don't see any risk on currency on this end. Just sorry for asking. Just one question more to you. Looking from last three quarters that was ahead in the industry in terms of the growth in volume, What is your sense on sustainability of these kind of growth? It's very tough to answer that. Guided, it would be more higher or you you want to revise the growth rate. Right. Rahul, very difficult for me to exactly give you a guidance on the numbers, and that may not be right because situation is still pretty volatile. There are some categories, there are some channels and geographies, which are really not firing to their full potential. So difficult for me to give you exact number, but our attempt again will be to gain market share, increase penetration across the categories and improve efficiency in the business and also do cost optimization to take care of the margins. And our attempt will be to continue with the momentum that we have built in the business of this kind of a growth. Okay. Thank you so much, Mohit, and all the best wishes to you and your team. Thank you. Thank you, Rahul. Thank you. The next question is from the line of Abhijit Gondhu from Antique Stockbroking. Please go ahead. Yeah. Hi. Congrats on a very strong set of numbers. My question was, you know, from a two year perspective, which are the categories where you see which which would be the, you know, key drivers? I mean, health supplement has done really well. How much of that food feed is scalable going ahead? Care oil air care as well is has been one category, which has been lagging. But but if you scale it up and the way it has done in the current quarter, the next two years would be up to two to three years, you know, and basically scale it up. But food is one category where a lot of potential is. So from your perspective, which will be the categories that over a two to three years period to fill? Said, Abhijit, your audio is echoing a lot more. Sorry. Yeah. So from your perspective, would be the category that would really drive growth during the next two to three years? It's sort of follow-up from the previous question. Right. So, Puneet, I think all the categories are, you know, strategy growth pillars for us. While health supplements did very well in the current year due to the COVID issue and that that that peak growth momentum may be moderating a little bit in health supplement. But strategically, I think for next two to three years, health care should drive the business. In short term, which is maybe six months to a year, the categories we got impacted by COVID, which is more hair oils and foods and shampoo business, they all will come back and help us in the growth for the next year and try and will offset the little depression that we may see in the growth rates of health supplements or health care happening in the current year. So overall, long term, I think it will be more health care, which will drive our business, and we will also focus more on health care because at the core of the company, along with HPC and food also because we're doing innovation across the board, but more health care. In short term, it will be more HPC for us than foods. Okay. And in in health care, in OTC and ethical, Are we doing any are we taking any special initiatives to, you know, tap chemist and to really drive growth? Because a lot of those health users also require some amount of push from channel, you know, because I know the doctors are very less in numbers if we try it. So any special initiatives or any special thoughts over there? Yeah. So, Vijay, yeah, definitely. Chemist channel and engagement special customer engagement with Chemist channel is one of the drivers in the GTM strategy for us. A, expansion of Chemist channel. We, at the moment, reach out to around two lakh 40,000. We want to go up to two lakh 70,000 chemists, and this is just for the current year. And then we will go up to further expansion as we embark on the next vision. So chemist is definitely our focus. We are trying to redo our planograms in the chemist outlet. And chemist engagement programs are also, as we speak, happening and focusing on pharma wholesale also. So that is happening as we keep launching innovations in health supplements, like rightly noted by you, to increase our efforts. So as far as the ethical business is concerned, our doctor connect is going up. Our Ayurvedic chemist counters will go up, and our feet on speed with our product specialist. And ayurvedic sales promoters are also going up in number as we speak. So the Vedias are not small in number. They are five lakh in number as we speak, and we are only connecting to around a 100,000 where they are today. So there's a huge headroom to cover. And so in the case of Ayurvedic pharmacies and also allopathic doctors, today, we are not covering allopathic doctors, and allopathic doctors are also now very inclined to prescribe ayurvedic adjunct medicines to allopathic. Okay. Got it. Got it. Thanks. All the best. Thank you. Yeah. Thank you. The next question is from the line of Abhish Roy from Edelweiss. Please go ahead. Sir. Just one small question. So your ad spend has been an outlier past two quarters. I understand such a strong funnel of new products. Now with the pandemic related consumption also stabilizing and your new products also seeing good growth, when do you see the growth in ad spend normalizing to the growth in the sales? Currently, it's two weeks of the sales growth. Right. I think from the current quarter onwards, Nish, I think in the short answer, your question is current quarter itself because but we will monitor the situation in case we get a good sales upside, then extra margin will be deployed back into advertising. But it'll it's it's a balancing approach that one has to do. And but our higher investment in advertising is actually paid up very well for us. It's been in the past six months. But why bulk of it is going towards new products? Not not necessarily a niche. It is not because a lot of NPT that we launched are contextual, and there was a intrinsic demand which was there in the environment for the NPDs, and they got pulled up. For example, whether it's a Tulsi drop or the Haldi drop or hemp juices or it is Giloy or Ashwagandha or immunity etcetera, it automatically got pulled up, and we didn't have to spend too much of money. The majority ad spend have been on power brand, and they are junked entities that we would have rolled out. So it's not too much on the entities. So it's been on the core brands, and, this is only helped to strengthen the core brands. Like, Chandra saw a lot of investments on the back of Abhishek Kumar's creative that we guys launched. And he saw a lot of, ad spend on back of this controversy which actually happened. We spend a lot of money on real also with the real drinks coming in. So and calorie range also saw fair bit of spend on back of the homemade brand. That's why the power brand architecture is working very well because most of the NPDs that we are rolling out are falling under the power brands. And new product advertising only has a positive ramp up on your key brand, and we are able to scale up that business faster. And last question, so on manufacturing capability because of COVID, are you also now doing much more automation within your factories to get productivity gains over medium, long term and to address any such COVID crisis, say, in the future if it happens, can you address it far better than the few weeks? is because of such a strong volume growth, do you need increased capacity? So any any numbers you can share on CapEx next two, three years? Right. I didn't need to answer the question We've augmented capacity across our subsegment, be it oral care, Chavintraj, honey, and hair oil. So we've already put in CapEx. We put CapEx to augment capacity of more than 250,000 cases have been added actually in our manufacturing. We are also spending a fair bit of, money on improving our productivity under the project, Samridhi. So we have got 12 factories in all. So we are trying to look at, productivity improvement across our factories as we speak. The process is yet going to start in next month's time, and we are test piloting it in one of our units, which is our largest unit, and then we'll progressively do it in across our units. We're also robotizing a lot of manual operating jobs, and we've been able to robotize a lot of those activities, which are manual and releasing labor out there. As far as COVID kind of issue happens, we put in safety protocols already in all our factories, and we are strictly monitoring and adhering all those protocols as we speak. Okay, Mohit. Thanks a lot and all the best. Thank you. Yes. Thank you, Abnish. Thank you. Thank you. The next question is from the line of Amit Barovat from Incred Capital. Please go ahead. Yes. Hi. Thank you for the opportunity, sir, and congratulations on a good set of numbers. So two things, one on Chawanprash, just wanted to know, we've been seeing increase in penetration levels. Is it also to do with the growth rates coming largely from smaller players as we see market share improvement? Or is it driven by consumers, which were actually shifting to a branded trusted brand versus homemade Javen Prash? Or is it just the rising awareness? What would you describe it to? Thomas is all around, actually. The way we see our market share in Jawanpas has gone up by a 120 basis points, and this increase in market share is coming from smaller players shifting to lower Jawanpas. That said, a lot of smaller players who also mushroom because of the seven categories actually become very attractive for people to enter. And, so they have entered. So the regional players who entered into the seven plus category, and they were helping to expand the pie. So as the pie gets expanded, the people shift in from local players to more national players like Dabbit seven plus So therefore, there's a penetration expansion, and also there is a market share increase wherein we are taking share from smaller players to ourselves. So as the category keeps expanding with more players coming in, we will only be the beneficiaries of the market leader to get the market share gain from them to us. And just one small thing, what would be the size of the category now, German price category will be in the range of around INR1000 odd crores. Okay. And just one more question I wanted to add on is on the modern trade thing. So now modern trade coming back, and we've been slightly under indexed in modern trade is what my understanding is versus the leader in the oral care space. You think that this could have some effect? While I understand the natural portfolio continues to be so strong, but do you think there could be some deceleration in growth rates because of this as the modern trade comes back? I'm sorry. I didn't quite understand. You think the modern trade coming back, will it have an impact on the oral care business? Yes. What I'm trying to say is that the leader, I mean, was over indexed is over indexed in the modern trade, and we've been under indexed in modern trade. Some channel kind of shift happened, and probably we were not impacted much because modern trade for us is anyway not so significant in the oral care space. And now that the modern trade is coming back, the leader will also getting aggressive and try to grow ahead of the market. In that context, do you think or do you feel that e commerce is strong enough for us to actually handle it and natural is also strong enough for us? Amit, I think that's a great opportunity actually the way I see, because we were not very strong in modern trade. Generally, what happens is your market share in the modern trade are higher than your GDP market share. And, inevitably, if you see for the multinationals because you can buy space in modern trade, and that's what is your strength. It's very easy to garner share of shares in modern trade, and share of shares gives you market share. So I think it's an opportunity for us to at least have our market shares being represented in our share of shares in modern trade. So we are actually ramping up our operational excellence in modern trade to see that our shelf shares are in line with our market shares. So we will want to grow at a higher clip in modern trade as compared to in GT. And to gather market shares in modern trade is much easier as compared to in the GT business because GT is more demand driven and modern trade is more execution driven. And which generates demand because it's a point of sale and there is a consumer moment of truth which happens with the product and he can buy you. So that's actually opportunity for Dabler as I see it. Thank you so much for this question. Thank you, Amit. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Mohit. I just had one question. I wanted to understand your thought process on how do you look at managing the portfolio complexity that this aggressive new launches, you know, thought process brings in. In particular, you know, what are your thresholds post which you consider that the new launch needs to be, you know, planned or cut? Sorry, Ravi. I did not catch the last part of your question. Understand you're saying how do you manage complexity? Then what did you ask? You have thresholds on where do you look to cut SKUs, product variants. Right. So okay. So we are continuously looking at rationalization of They're not making any profits or don't contribute to the top line. So that exercise is continuously happening as a part of our efficiency driving exercise. And every month, we review a few which are not delivering business or they are not delivering to profitability, and we rationalize those SKUs. That said, yes, complexity is there. And because of the complexity, we've done the line split as a sales end. And, as far as marketing and production is concerned, we've been able to manage this diverse portfolio complexity, and it's a part of the game for us. But as far as the front end is concerned, we are doing a line split and test marketing the line split then going forward. And sorry, when you said the split sorry, the scanning of bands that's based on profitability or growth? Both. Okay. Thank you very much. Thank you, Amit. Thank you. The next question is from the line of Manoj Shah from Laxco Investments. Please go ahead. Yes. Hi, good evening gentlemen. My question is that with the current trend that people are shifting from Allopathic. Not audible. Yes. To the sorry? Yes. Please go ahead. With the current trend, the people are shifting from allopathic medicines to the ILLA. And with the current pandemic, I just wanted to know, would you like to refocus yourself on the medicines which Daba used to manufacture the idea, like, asavas, and so on kind of it? Do you think that's the good time or a fortune time for Daba to put the more trust on those segments? Right, Milose. Rightly identified. I think the entire Ayurvedic system of medicine has actually got a tailwind right now with Ministry of Ayush also putting focus and giving government advisories to use a lot of prophylactic Ayurvedic medications, and shift is definitely happening from allopathic to ayurvedic. So we are trying to leverage on this tailwind going forward, and we are that's why we are expanding our classical portfolio. If you see in the current quarter also, we've rolled out Amla children, Ashwagandha children, and Maduras and for fighting typhoid fever. So we have a huge gap between us and the local players in different regions who are, you know, owning Ayurveda. So we are trying to plug the gap because so that when the where they are prescribed the Ayurvedic portfolio for a patient, he has an entire packet of products available within the tablets. So we are trying to plug the gap irrespective of what revenue and the profit that we guys are making because we want to be one stop shop for all the entire portfolio of Ayurveda to have India. So we are working very hard to create a pipeline in launch products so that we are truly, you know, full scale ayurvedic organization. So that's what one is working towards. And that's been one of the growth drivers for our classical business. Now the classical business has got multiple subcategories like you mentioned. There are gold products in it. There is quartz in it. There are in There in it. There's multiple subcategories here. Yeah. Because and how how big is the current portfolio of this? How big? We do a business of roughly around 250 crores here, and the market is as big as a thousand crores plus. So we are not even 25% market share here. And do you have any plans to, like, push up? Because the problem with this is you require vendors who will promote or write these prescriptions. Okay? So so are you finding out sub queues or something of that sort so that there are more availability of Vedyard within the cities, metro so that people, if they are looking for an alternative medicine, so they can visit those kind of things. So anything we are working on trying to enhance the I will make availability of that kind of thing. Sorry, I could not understand. If you could be a little louder, I will be glad there. Yeah. Yeah. Doctor. I will how you can make it? Whole thing is the has to be available, and and they have to write the prescription to buy our products. Okay? So step is to have the availability. So what steps are taking it to promote that kind of Right. So a very good question, Manoj. I must compliment you for this question. What we are trying is, double being the largest IVD company, we are trying to create a platform. The platform is still in the testing phase. So we are trying to create a platform digitally wherein we are able to connect the Vedya to the patients so that Davel becomes a one stop shop where patients can come in, and they can seek consultation from the Vedya. And, that portal is still, being, tested out, and that's in the beta phase. And, once we are finalizing it, then we will roll it out. So we are very conscious that, so along with this, we are also expanding our reach to the existing vendors by having more, product specialists and who will reach out to more people on street. And like you rightly said that now, Ayurveda is becoming more and more mainstream, so we're trying to reach out to allopathic doctors also where the reach is much higher so that they can supplement their medication along with the Ayurvedic, products. So that's what is happening, and also making our medicines available in regular chemist outlets by creating planograms in the regular chemist outlet beside just Ayurvedic chemist out counter. Okay. Okay. Thank you. Thank you very much. Yeah. Thank you. Thank you very much. Thank you. The next question is from the line of Sunita Sachdev from UBS Securities. Please go ahead. Yeah. Hi, Mohit. Hi, Sunita. Nice long conference call with lot of insights. Thank you so much. But one question, any outlook to what do you think of the packaged juice business now that, you know, we are close to seeing everything open up, mobility increasing? Any insights that you could share with us on what is the direction now in the packaged juice business? Right. So, Rita, the package juice business during the COVID time declined by around minus 50%. From the decline of minus 50, it's gone up, not in black yet. So it's still minus five. If I look at the business in the month of December, we see a 2% growth happening in the packaged juice business. Our market shares have gone up by 20 basis points. So I think by the time we come into the season, which is in the month of March, I think there will be a growth trajectory which will start here, and we should be beneficiaries of that. And we're also entering a low base of COVID, So that should order well for our food business and juice business. Yeah. But any kind of tentative kind of growth levels that you would like to kind of highlight? I mean, would it be going back to the same sort of level that we've seen? Or you think because of the new launches and your new initiatives, we could look for slightly higher growth in this segment? Yes. I think the growth should be pretty robust. I can't give you exact number because I also don't know the number, but we launched few of NPDs like we got into the drinks market. So we're scratching the surface, not even significant market share players here. We've launched 10 rupee price points and a lot of variance in our premium juices also. So business should trend in double digit. Alright. Thank you, sir. Thank you. Thank you, Sridhar. Yeah. Thank you. Ladies and gentlemen, that will be the last question for today. I would now like to hand the conference over to Ms. Gavananuwalia for closing comments. Thank you, and over to you, ma'am. Thank you, Arun. Thank you for your participation in this conference call. A webcast and transcript of this call will be available on our website. Thank you again, and have a nice evening ahead. Thank you very much, gentlemen. Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.

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