Q3 20/21

Feb 8, 2021

Ladies and gentlemen, good day, and welcome to Broadridge Consumer Products Limited Q3 FY 'twenty one Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in listen only mode, and Please note that this conference is being recorded. At ISEC, it's our absolute pleasure to host the coverage consumer management team on the 3Q FY21 results call today. At ISEC, we have been long term believers in the GCPL value creation story. Particularly in the Q3 FY 2021, it's been a good performance, particularly in those parts of the business where we would have wanted to see growth at consensus, we have seen that. And it's more important that this is given the market context in the delivery is how we see it. That said, over the course of the results presentation and the call, we would see clarity on potential for long term double digit volume growth in, let's say, in India, HHI and also the new management driven turnaround in Africa. That couple of things if time permits I would definitely want to engage with the management after we take the question queue later. Thank you and over to the GCPIL team. Thanks Manoj. Good evening everyone. We hope that you are staying safe and healthy. We will be covering this evening the results for the quarter ended 31 December 2020. On the call from GCPL, we have Mr. Baba Goderich, Chairperson and Managing Director V. Srinivasan, CFO and Company Secretary and Mr. Panisha, Head, Investor Relations. We will start with Nisha sharing her perspective on the business performance. Over to you, Nisha. Thank you so much, Pratik. Good evening, everyone. I hope you and your loved ones and families are safe and healthy in these times. And thank you so much for being with us on this call today. In quarter 3, GCPL delivered a 2nd consecutive quarter of double digit profitable sales growth. Our overall sales grew by 10%, EBITDA by 14% and profit after tax grew by 17% excluding exceptional items. 81% of our global portfolio compromises of household insecticide, hygiene and value for money products and had a combined growth of 14%. Hygiene continued its strong growth momentum growing by 19%, and we look forward to strongly building on this category opportunity in the years ahead. Value for money grew by 22%. Growth in household insecticides was at 5%. From a geography perspective, India recorded a sales growth of 11%, led by strong growth in hygiene, including soaps and hair color and steady growth in household insecticides. Overall, rural grew much ahead of urban. The scale up of the e commerce channel continues, and we have also seen a recovery in modern retail. Indonesia delivered a soft performance with a 2% constant currency sales decline. This was impacted by adverse macroeconomic factors, the gradual recovery in air fresheners and high competitive intensity in wet wipes. Our Africa, USA and Middle East business delivered profitable sales growth of 17% in constant currency terms. I'm very happy with the strategic focus and growth mindset that Anish has brought to the team. We continue to have a strong balance sheet and remain more watchful on receivables management. Net debt to equity ratio continues to see a reduction to 0.14. I'm pleased to share with you that our teams remain resilient and we continue to be agile in serving our consumers. We're using this crisis as an opportunity to digitize more rapidly and build further distribution platform. As always, our values matter and remain very committed to enabling the safety and well-being of all Godrejites and serving our consumers and communities with our full hearts and minds. Thank you and happy to take questions. Thank you very much. We will now begin the question and answer session. The first question is from the line of Abhij Roy from Edelweiss. Please go ahead. Yes, thanks and congrats on second quarter recovery. Recent PH controversy, how does this impact your communication? Do you see the screen player making this as a serious issue medium, long term? And because this doesn't directly impact you, do you see this as an eventual opportunity also? Hi, Arnish. Thank you for joining us. I don't think it really impacts us and we continue to be very confident of our soap quality. In fact, a lot of soaps are not grade 1 and we are grade 1 soap with very high oils in our soap. So I think we're very sort of confident of our strategy and we don't see ourselves sort of getting embroiled in this pH story right now. And my sense is that it will blow over quite soon also, at least my personal opinion. Right. And sanitizer sales have pulled off for almost every player except 2 core players. How do you see taking advantage of this because many players are now exiting? Would you remain serious in this given 2 entrenched players are already there? So I think when we talk about hygiene, somehow everyone comes very quickly just to the sanitizer category. So one I would like to say is that the hygiene trend is very broad based, whether it's on hand wash, soap, disinfectant sprays, toilet cleaners. We just had the world's largest master class in immunity and hygiene, and we'll see that play across a number of categories. In terms of sanitizers, I do think that we will play in the category, but we definitely won't play a sort of me too game. So you will see some amount of innovation from us in sanitizers. And we do think sanitizers, as a category, just even the basic hand sanitizer will grow and penetration will grow. But I don't think we'll play it just that without innovation. So you'll probably see quite a bit of innovation from us in that category coming. To us. Sure. And last question, in fact, Manoj already asked, so if you could elaborate on HI, are you happy with this growth given Q2 was disappointing? Customer is focusing on well-being safety. In that context, this growth seems lower than expectations. So what is happening here? Yes. So anything on competition? Sure. Sure. So if you ask me, am I personally happy with our HI growth is that the answer is no. And I hope our HI brand managers and Sunil and all are listening into this call right now. I think that being said, we are still what I said at the beginning of the year in terms of HI, in terms of consumer demand, wanting to be more healthy, so we've seen a lot of penetration growth in the category. So there's been significant penetration growth higher than in any of the other recent sort of previous years. The other things that we're seeing is that our premium formats are growing well, well in the double digits. So this would be sort of electrics and aerosol are growing well. I think in electrics, this new flash is definitely a transition for us to a much better machine, and we'll see that also play out over the next year. The other piece that again talks about the health piece for consumer is non mosquito, so products like in cockroaches, rats growing very rapidly. This is in the high sort of 20s. So we're seeing that sort of really take up. So the real place where we're having a big issue, Avnish, is this bowling format. So that business is definitely dragging our whole HI growth down. We have thought and this in quarter 1, this illegal incense sticks were really very much on the back foot because their supplies and stuff were not available. They are back in the market now. So I think our sites on the burning format still continues. And we still have some arsenals there in terms of what we're going to be doing in the next 6 months on burning formats with some other new products. I don't think our natural incense stick strategy has worked. It has worked to a certain extent, but not as well as we had hoped. So I think this burning format, getting a better fix on it is important, while at the same time really concentrating on the penetration and premiumization in things like gold flash and aerosol. We launched one of our best products ever called Smart Spray in aerosol, which is a no gas aerosol with very long lasting efficacy. So we'll continue to drive but the penetration is still lower and the premium formats to drive that and definitely fight back the burning formats. Sure. That's all from my side. Thanks a lot. All the rest. Thank you, Rudneesh. Thank you. The next question is from the line of Parseeb Bantaky from IISL. Please go ahead. Hi. Again, a few questions on HI. So firstly, could you give some idea for this quarter, what percentage of your machine sales are the gold flash machine and what percentage of the refill sales are or liquid sales are the gold flash liquid? Hi, Parthiv, this is Sameer here. So I think for competitive reasons, we would shy away in terms of dissecting within our electrics portfolio what has been the mix between gold flash and kind of active plus refill. But as we talk, the saliency of gold flash has been kind of moving up. In terms of machines, I mean just to give you some kind of data points, we have already seeded in close to 3 crores of machines, right? And in very short term, we are looking at seeding in incrementally 1 more crores of kind of machines, right? And once the machines are in, we do expect, I mean, kind of refills also, I mean, to have kind of strong presence. And by the way, I mean, this quarter or last quarter, Q3, we did see close to double digit sales growth even in the entire electrics portfolio. So going over there has been quite robust. Of course, there's a little bit of setback, especially in the early part of kind of COVID environment. But we do believe that with the kind of product, World Flash is in terms of its efficacy, it's a winner product and we will see, I mean, premiumization upgrades getting driven, I mean, in electric format with CoolFlash. Sure. Secondly, on burning format, you had, I think, applied for regulatory approvals for incense stick with active molecules. So if you can just give some update on where we are in the process and when are we likely to get approvals on that? And secondly, in this presentation, I see that in Indonesia, you have launched something in the burning format, which I think is sort of an upgraded version of the Magic card, correct me if I'm wrong, any plans to cross pollinate this product into India? Yes. So I think, firstly, again, for competitive, we just don't want to share. But I think both these answers are pretty obvious even to our competitors. So I think you could expect in burning format some sort of answer to these illegal incentives and some of these things are in our portfolio as you said. Yes. And I think just to add, Suri, I mean, as Usha called out, the premium format, is solar and electric, have been doing quite well. And with incremental innovations as well as some very disruptive innovations, we do believe that this momentum should largely continue over there. And kind of relating soft performance in burning format, we will be tactically also addressing in very short term. We are looking at sort of driving our micro marketing initiatives, especially in coils. I mean, something, I mean, which has worked very well for us in soaps, including some more kind of variance, right? And in medium term, of course, we'll have some disruptive launches, which should kind of get even more in formats to kind of steady to your respective levels. Right. And my last question on Indonesia, the wet wipes, you said there's a competitive issue there. If you can give some idea of the quantum that I mean quantum of that issue in terms of how much has your sales growth been dragged down by or rather if this issue was not there, how much sales growth would you have clocked this quarter? Yes, I mean in terms of data, again, Pansy, that price is roughly around 14%, 15% range of our overall Indonesian business. And when a new player has sort of come in the market and is sort of kind of adopting a price warrior strategy at this point in time, do we have seen that in the past also? I mean, players coming in, but over a period of time sort of maturing out in terms of at least not being a price warrior. We are, I mean, from our end planning tactically, I mean, how do we address it as well as in medium term how to kind of get back on growth, I mean, in sort of wet wipes. My sense is the growth would be at least kind of 3% to 5% higher than what they have been had this wet wipe issue not being sort of there for us. This seems to be a pretty commoditized category in Indonesia, isn't it? Because we have had, I think, 2, 3 years ago also similar kind of heavy discounting market share issues, etcetera, etcetera. To that, to that, of course, they are having innovation also per se in this space over a period of time. But, yes, I mean, it's like a pretty kind of competitive category. That's the way I would be able to sort of focus there. Okay. And Percy, one of our growth drivers, Indonesia is really building our GP much faster than we have in the past. I think that's a very big opportunity from us for us there and knowing taking those earnings from India. And that also I think helps with some of these issues that happen when these mini marks and stuff when discounting etcetera. Got you. That's all from me. Thanks and all the best. Thank you. The next question is from the line of Arna Mitra from Credit Suisse. Please go ahead. Yes. Hi. Thanks for taking my question. My first question was on Africa, where last couple of quarters you've seen a good recovery in sales. This quarter margins also have recovered pretty strongly. Just wanted to understand, are there any short term factors which have helped us? Because we hear about this container shortage globally and I know a lot of your competition is important there. So I wanted to get some sense about the sustainable part of this and is there any kind of gains you've got in the short term which could reverse as things normalize on the supply side? Hi, Arnaud. No, I think to begin with, we did have significant competitive advantage, especially in the early part of COVID. I think deals have done a good job in terms of retaining those consumers, right, continuing to invest in terms of creating strong brand equity as well as kind of executing some very low hanging go to market initiatives. And combination of that has resulted in back to back 2 quarters of steady to strong growth rates. I think the building blocks are still kind of getting kind of in place, will also be executed over the next 6 to 12 months. But we do believe, I mean, the growth rates are sort of sustainable in medium terms. Some of the markets, especially kind of West Africa as well as parts of South Africa, have been doing quite well. And the point is to kind of continue this momentum and sort of also build on some again kind of opportunities in medium term. So yes, that's the way I mean we are kind of looking at I mean multiple markets in Africa over a period of time and also in some of the markets like U. S, I mean, we are seeing a lot of good news with sort of partnership which we have started with Walmart on kind of a head extension category, which I mean, strategically over a period of time could be a big bet, right, because their extension in U. S. Is more than $1,000,000 size category. Yes, I mean building blocks, I mean sort of getting in place, getting executed, and we remain relatively kind of confident of continuing this momentum in mid term at least. Least? Yes. I think we like Sameer mentioned, partnership with Walmart in the U. S. I think that's an opportunity that's come because they want a certain type of partner and they want supply chains actually from Africa for these products versus just sort of Asia. But these are actually advantages yet to kick in. There could have been we know that in dry hair, there are sort of shortages in certain products, and we are actually ramping up local manufacturing to meet those. But we feel that some of these advantages should also play out in the medium to long term. Okay, fair. Thanks. That's quite helpful. And my second and last question was on the India new categories that you entered before some of the segments in Home Care like, pro cleaners, toilet cleaners, dishwashers and things like that. So I mean, as a bucket, if you want to take all of the things, all new categories that you entered this year, if you could give it a sense of how much does it contribute to revenues today? And specifically in the home care categories, what is the initial feedback that you have in terms of your product acceptance, distribution and things like that? Yes. So I can't give you exact numbers again, but I think there are particular categories in hygiene where we are very excited about. 1 is the Gojage brand name, as you know, is extremely sort of strong, which gives us an advantage. In some of them, we've really cact very good formulation. We also think some categories are on that cost of penetration sort of take off and that we can really with our distribution sort of build it well. So I think hygiene, I've been watching this news or people keep asking, oh, is hygiene office high? I think sanitizer is off that 4th quarter sort of high and there was a glut in the market. But I think the consumers' awareness on taking care of their health has fundamentally shifted. And in that, that their consumption basket has also shifted. So I think for a company like ours, that can be really advantageous. And another example of that I'll give you, in Indonesia, which has been a sort of difficult year, they've built this new brand called Sanitor, and they're doing a fantastic job with it. And it's actually nothing not really built on hand sanitizer, correct? So biggest category that they've built is the sanitizing, sprays because we have an advantage both from hip aerosols and from seller Space. So we have a cost advantage and we've done a great job there. Now we're going into bath soap, a category that's very big. We know well in India. We see an opportunity in the market there. So I think hygiene as a category is in brands well positioned in hygiene. There's a very strong opportunity going forward. Okay. Thanks so much, Anita. All of it. Thank you. Thank you. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi. Good evening, everyone. My first question on the can you just talk about the gross margins and EBITDA margin, the way in which you see it in the next few quarters? Hi, Vivek. So, yes, I mean, in India, we are seeing gross margins decline and that's largely driven by, I mean, contraction in the source gross margin, which in turn is driven by the high farmer derivative prices and the lag between increase in input cost and increase in end consumer pricing. So we are quite calibrated in terms of our pricing approach and that has paid off very well. I mean, look at our performance over the last 2 to 3 quarters and then the growth has been in double digits. Over the last two quarters, the growth has been in mid teens, and we continue to gain significant market share. And this is in the context of category generally seeing uptick in consumption because of higher hygiene needs. I mean, there has been increase in frequency of bathing, there has been increase in frequency of hand washing and also very small players are quite stressed because of increase in commodity costs and they're normally operating on vapor thin margins. So we would definitely continue with this strategy in very short term. What we will also do in parallel is something what we did in last quarter itself, right? I mean, so the gross margin kind of contraction will be sort of mitigated through cost saving program. We saw that in India, wherein the overall EBITDA margins declined by 70, 80 basis points. And then by leveraging our global portfolio, we sort of ensure that at global consolidated level, the overall EBITDA margin expands. So we will continue, I mean, to kind of have that strategy wherein we sort of prioritize kind of growth over margins, especially in subcategory. But at overall profitability level, there should be multiple levers to ensure that we do see at least margin maintenance, if not expansion in short term. I see. And just a follow-up here, Sameer, in the context of, let's say, the low A and P base that you have starting Q4 last year, and of course, some part of that was is understandable. But let's say, in the context of A and P expenses, I would imagine will move up. Do you still think that margin should sustain? So we'll see, Vivek. I mean in very, very short term, if there is a very serious trade off in terms of growth over margins, I mean we will skew more towards growth. At this point in time, there are no such very serious sort of trade offs, right? But we will continue to invest, I mean, because medium, long term, I mean, investing on new product launches, investing in creating kind of client equity as always kind of trade offs, right, and into sustainable growth. So that's the way we will continue our approach even on E and P investments. I mean, very short term for margin maintenance, the last thing which we'll do is kind of tinker around with E and P spends. I see, I see. Okay. And the second question is on HHI. The burn in format, what Nisawa mentioned about, it hasn't worked out as well. And I remember that we have had done a lot of work on the product and the value that you were giving to the customer, etcetera. What is the reason you think? Is it the pricing which was an issue? Is it, let's say, active ingredients not being there? What is the issue? Why would you say today that the product has not worked out despite you taking all the efforts at that point of time at the time of launch and thereafter? Yes. So I wouldn't say the product is not it's a natural product. So some people who use it absolutely, they love it. But a natural product does not give you the drop down efficacy of senior mosquitoes like 4 in front of you. We did know that, that was against an active infant state that was a challenge, but that was our best option at the time. We will now go in with other burning formats that sort of take on the illegal sort of the interest takes with efficacy head on. And we know look, I mean, we have to tell people that we launched Fast Guard. We had such an amazing run with it, and it did really well. And then this illegal intent stake is almost like Fast Card 2.0 to the consumer. It's a better version. It works better for them, right? But we will have 3.04.05.0 of this version. We are restricted a little bit by the Indian government in terms of registration timelines and stuff. We have been below our own expectations. And I think this is something that we will not give up until we get sort of right. And we have a lot of confidence in our both in our progress and our distribution to get this right. I see. Sure. And is there a challenge to from an HI margin perspective? Is there also challenge that on one hand you have to target the illicit market and where price points will be far lower. And on the other hand, you have your own, let's say, priorities on the margin. So is that also what makes the You know, the way I think about it, no, because almost like 75 to 80, the sale of our portfolio Sorry to interrupt you. Ma'am, your audio is not coming clear. Can you hear me now? Yes, ma'am. A little better than before. Okay. What I was saying is that a lot of our portfolio in HI is really in 75% above is in the sort of premium format, where I don't think margin is an issue. But in India, you have to pay both the premiumization and premiumization penetration for the premium product, but you have to pay the mass volume by a mass player also. So we have to get this burning format right. And don't forget, we're also the biggest coil player and that's also something where we you will see some innovation and strategy from us on coil. Got it. Wishing you all the very best. Thank you. Thank you. Thank you. The next question is from the line of Prasad from Bank of America. Please go ahead. Yes, thanks. So a couple of questions. So firstly, the balance sheet is now almost being leveraged with net debt liquidity at about 0.1%. Historically, we have built businesses at such times through inorganic routes. So in this context, would you like to comment as to if the company is exploring such routes again? And if so, what are the criteria this time? Sure. So, I think I mentioned on a few calls before. 1, at the current stage, my focus and the company's focus is definitely being on organic growth and making sure that it's been double digits organic growth. I'm going to interrupt you once again. Ma'am, your voice is coming a little distorted. Please stay connected. I'll call you back. Can you ask other people to hear me? I think, Neeru, we can hear her very clearly. I don't know about Adi Sur. Ramesh, I think you are audible. Yes. Ramesh, I think you can go ahead, please. Can you am I still on the phone? Yes, ma'am. Okay. Like someone's trying to drop me off because my answers are not good enough. So what is that? Anyway, so coming back to M and A, so definitely organic growth is our focus, but we do know that inorganic and we did grow IVRs that grew very significantly with inorganic growth and we have a lot of learnings from that time. So in India and Indonesia, we definitely look at interesting acquisitions. We might look at interesting acquisitions in Bangladesh also. We see markets like Bangladesh, Nigeria, Indonesia I'm sorry, Bangladesh, Nigeria and South Africa with the potential to be like our Indonesia business. So in India, Bangladesh, Indonesia, we will actively look and we are actively looking organic growth. In Africa, like I sort of mentioned before, I do feel that the right to do inorganic before that happens, the current business sort of growth in margins need to be stronger. So yes, we are always looking at M and A. Okay. So the question was more from Indonesia. Yes, it's done, Ashish. Thank you. The next question is from the line of Amrit Sachdeva from HSBC. Please go ahead. Hi. Is my voice clear? Yes. This is clear, but unfortunately, the echo is still continuing. Yeah. Echo, I could hear myself also, so I can hear you. Can you repeat operator or ISAC team to revisit this and correct this, please? Sir, one moment. Participants, please stay connected while we rejoin the speaker back to the call. Ladies and gentlemen, thank you for your patience. I now hand the conference over back to Ms. Nisa. Ma'am, please go ahead. I've totally forgotten what question we were on. What was the question for me? Does someone remember? Yes. I think we had Prasad asking one question, but he was requested to go back in the queue. And we had Yes. I think we can go ahead with Amit's question first and then Unaher Prasad coming back from the beginning. Sorry guys for the glitch. Yes. And my apologies since it seems to be me causing it. Yes. Thanks so much and thanks so much for taking my question and a very good set of numbers in Africa. So congratulations for that. So just one first question is on Soaps business. So obviously, there's a clear inflation, which is necessitating price hikes and constraining some amount of broad gross margin expansion at the domestic level. But having come this far in terms of marketing mix, the entire soap business, how do you feel conceptually whether this inflationary environment suits you better or some amount of deflation helps you more as you sort of maximize, optimize EBITDA growth and gross margins and also volume growth. As a strategic construct, why I'm asking this is that given that the base of this year will be very high and we are going into the next year with some amount of inflation building up, how we should sort of anticipate like next year for soaps? Thanks, Amit. I think on a lighter note, we would love, I mean, both kind of environment to sort of be beneficial to us. But historically, I mean, we have always gained significant market share, especially in high inflationary environment because that's where none of the small local players make it on a sense because they typically operate on wafer thin margins and in high kind of inflationary environment and then they just kind of move away temporarily from the category. But I think such that we have always called out that we are a distant number to player. We continue to gain share and this is not phenomena of last 2, 3 quarters. This is something which has been kind of going our way over the last 18 to 20 months. The micro marketing initiative worked very well for us. So I think continuing steady state performance in soups even next year is the way, I mean, we are sort of planning for at this point in time. And despite having kind of a base, I mean, the way you sort of called it out, we don't expect, I mean, any sort of a mismatch between what should be a normative volume growth, value growth, I mean, in some category for us even in the next year. Sure. So if I read correctly, maybe you're looking for still like a double digit soaps growth, maybe like a mid to mid teen type of thing or I'm not asking for guidance, but I'm just thinking of how we should think about domestic business and maybe flat margins, if that's a good scenario for you? Yes. So I think I mean, not getting into guidance, Amit, but there will be some carry forward sizing also, right? I mean, it's not sort of 1 or 4. Definitely, next year, there will be some carry forward sizing impact. We will continue to gain market share, I mean that's for sure, right? I mean and that's the way we are kind of planning on multiple initiatives within soap category. I did call out earlier that in very short term, if you have to prioritize growth over margins, especially in Soaps, it's a no brainer. We will prioritize growth, but we will sort of mitigate this Soaps gross margin hold through other revenues, whether it be driving favorable category mix, whether it be costing programs or even leveraging our global portfolio. So that's the way we think of overall profitability and balancing kind of both growth and margins in its way. Okay. Very clear, Sameer. Thank you so much. And Second, very quickly, if I may ask on Latin America. The growth has been very impressive. If I may observe, on the constant currency terms, this looks like a structurally business on a roll, it seems. And we get to sort of discuss less of it, but why margins are so volatile in that business? If the business, even in local currencies, is actually doing it so impressively, why margins are all over the place for that business? What could be the sustainable margins? And how should we think about this? And so just help me understand that, please? Sure. No, I think Latin American business has been kind of very robust for us over the last year to year and a half, right? Typically, this used to be the cluster or a bunch of countries, which were in mid single digit, EBITDA margins. It's actually an inflationary economy, right, Argentina. Correct. That's where we will see, I mean, some part of growth also driven by kind of inflation, but there is also very robust volume growth, right? I think the intent is, I mean, again, on average annualized basis to have double digit margins. And we think we're very much on track. There is scale leverage sort of playing in our favor. There is also a stringent costing program which is sort of playing in our favor. So we should continue to see again this steady to strong performance holistically in Latin America and New Zealand business even in medium to long term. Sure. That's very helpful. And are you planning to bring any more products from there other than the Cremes or that was inspired by LATAM? But are there any more cross pollination opportunities exist from that business? Yes. So we continue to explore, I mean, multiple cross pollination opportunities, honestly, not just on LATAM to any other countries within our kind of pool, but across kind of countries, right? So we very much continue to work on this potential cross pollination and in turn kind of growth opportunities. Yes, I think in hair color, there is a lot of sharing on formulations and different types of sort of innovations and stuff, which go from different teams to different teams. Okay, great. Thanks so much and all the best, Nishan. Thanks so much, Amish. Thank you, Amish. Thank you. The next question is from the line of Sreedesh Badriji from Centrum Capital. Please go ahead. Yes, hi. Good evening and thanks for the opportunity. I have 2 specific questions. In the domestic market, we have reported 14% growth on soaps. Can you help me to understand how much is the price and volume and if there is any price increases that has happened and affected in the quarter, which is gone by? Yes. So I mean, good part of growth, I mean, I would say 2 thirds would be sort of volume and a third would be price, Suresh. I mean that would be the composition, I mean overall soaps, you know, value growth. What I wanted to understand, the follow-up on that, we all know that the inflation is inching up because of palm oil and PFAD. Has it covered the price increases what we have expected or it's not yet covered or you will take some more price increases going forward? No, Sudesh. I mean even if you look at category level, I mean the overall increase in PSID, PSID has been anywhere between 30 to 50 percentage, right? So we will be theoretically looking at 30 to 50 percentage price increase on soaps, I mean, which is not practical. So we'll have to be sort of calibrated. We'll have to have pack price mix architecture through which we play this pretty smartly, right? As again, we called out earlier, we will want to gain market share. We want to continue this momentum. We are seeing kind of tailwinds in category opportunity to gain share given some small local players, so we'll have to balance both, right? Such that we continue on this strong growth momentum as well as in parallel have an eye on how the overall margins are shaping up for the global business. Sure, Samir. My second and last question on the international share undersides. I see that there are challenges and we have come over every time we have some other issues pop up. What I really want to understand now we have gone into sanitar Healthscope. So is that the growth which is the formula which one can look at growing international business? And more specifically, how big is and what is the winning thoughts we have about launching Sanitar Healthscope? So I think there are multiple growth factors to Indonesia. And again, to kind of set the context, I mean, the overall efficiency pace in Indonesia over the last 2, 3 quarters has sort of declined by high single digits to low double digits. So in that context, I think the performance is kind of not that bad, but of course, there are some areas which we need to sort of double click upon. In terms of growth potential, I mean, as Lisa called out earlier, the entire high yield scale up has been phenomenal, right? I mean, the entire kind of play, which started 8, 9 months back, has been pretty kind of interesting and meaningful now in terms of being kind of key growth pivot over a medium, long term period of time. There are opportunities in terms of white spaces even within the existing housing sector category because that plays largely into aerosols and electric and not in burning format. So the long lasting kind of paper, which we have launched recently, gives us a meaningful presence, right, in the burning format, which will be more than a 4th of the overall category in Indonesia. We need to sort of tactically navigate through the challenges in wet wipes and then continue to, last but not the least, build on the go to market opportunity, especially on the general trade, which is only a third of our overall business. But for the industry, this could be anywhere between 50% to 60% thereabouts. So there are multiple kind of growth to us. And we remain extremely optimistic in terms of medium to long term growth sector, I mean, in Indonesia. And we have seen Indonesia over the last decade or so as being a home run for us, whether it be kind of strong sales growth, whether it be kind of margin scale up. We remain quite kind of confident. In the very short term, we would work towards kind of getting it at least in positive kind of growth zone, right? I mean, so what was a very marginal decline at least in the last quarter? And on Canopy, so is that to improve the distribution because I guess health care is a bigger opportunity and there is a penetration which is happening. So is that the thought Or we have seen Yes. I think there's a so I think it's a large bath soap and soap in general is a large and the bath soap is not the only launch. We have some others also happening in the personal wash category. We feel that there is a space for a brand like Sanitorn. We believe we have the strength of the company to go into that market. So that's where the thinking has come from. And we see that the demand for health soaps is quite high. Okay. Thank you, Alicia, and thank you, King, for the Thank you. Thank you for being with us. Thank you. The next question is from the line of Alok Shah from Ambit Capital. Please go ahead. Yes. Hi. Good evening, everyone, and congrats on a good performance. I have two questions. So first is on the Africa cluster. Can you elaborate if the strong growth is essentially backed by distribution led initiatives, whether the rain selling now is happening versus the prior 3 years? Or is it purely market share gains led growth that is coming? That is the number. I think it's a mixture of a number of sales, right? And definitely, I think distribution has been a big push across the different geographies. And we are looking very closely to how much direct distribution versus wholesale distribution. We have had market share gains. Although in dry hair, Nielsen doesn't cover it, so we do our own sort of market share estimation. And we've also had some good success, especially in West Africa with new category development, whether it's in dry hair, with the restylables, with HI. So I think it's a mixture of factors playing in. Got it. Got it. And my second question is on the India HI business. Wanted to check how is the innovation pipeline now? What would be the time lines for the launch? And specifically, I would ask if there's some breakthrough innovation that you are closer to launching and that can meaningfully Are you guaranteeing the Jyoti records and SE Ronson or not on this call? Then I'm sure I'm happy to share it with all 200 of you. Years. In the past, you guys have yes, I have yes. No, I think It's also broad innovation pipeline at least. Yes. No, I think the innovation pipeline is pretty strong, correct? And innovation for us is both on the active molecule side and on the sort of product delivery side. So whether it's on naturals or on active base, I think one thing we can be assured of is the product pipeline and you will see more stuff coming from us next year also. We've actually had a number of launches this year also, right? I don't know if people have picked up on it, but we talked about Smart Spray, we've done Roche Bong in Cockroach. Like I said, this non mosquito portfolio, given the health sort of concerns people have is really sort of moving fast. So we will double down in all these. One sort of big pivot for us was this personal repellent. Like I've mentioned many times before that in other markets, personal repellent tends to be 25% to 30% saliency. Like in Indonesia, I think it's close to 30% saliency, where in India, it's like 3%, 4% saliency. And this year, that business has taken a role beating because of sort of people not going sort of out of home and stuff. So that's something that we really need to resurrect. But again, we feel that as kids go back to school and people go out fully, I think the kids back to school really will be a good opportunity to reignite that business. Right, right. No, I was just trying to ask because if till now we have been talking about competition from the illegal incentives, etcetera. But if tomorrow, one of the competition were to hit up or some nuclear were to enter, how is it that we are applying to hold that would it be more through innovation new launches? Would it be more through ad spend promos? Or how is it that you would look at this category? I think it's a mixture of all, correct? And I think the thing that we're most focused on is how do we we are frankly, we have about 50% of the category. So it's really and in the premium format, much like very high shares. So Rolly, it is our job to be educating marketing to consumers, getting them to sort of upgrade, convert them and giving them that value for money with efficacy and protecting them from these diseases and mosquitoes. So and as competition I always encourage good competition that serves the consumer well. It keeps us all on our toes. And if that were to happen, we'll I don't know, we dealt with competition many times. So we will we will decide how to serve the consumer better. Yes. Thanks a lot, Nisaba, for the detailed answer. Thank you. Thank you. Thank you. The next question is from the line of Parsee Pankakhi from Indian Feline. Please go ahead. Hi. Thanks for taking my question again. My question is on the Indonesia business, especially the GT rollout. I've been tracking GCPL since long. So basically, we have been now talking about this for almost 5 years. So just if you can give me an idea of what progress has happened on this point of GT rollout over the last several years. I mean, some point to point data you can share, let's say, your direct reach now versus what it was 2 years ago or any other kind of data which would help us understand what is the progress on this point? Yes, hi, Suraj. So I think to begin with, this has been kind of a structural growth keyword for us. I think in terms of data points, say, 2 years back, you'll be reaching out to 80,000,000, 85,000 outlets and now we reach out to close to 120,000 outlets. And the intent is to reach out to close to 200,000 outlets. I think what also happened is because of COVID, at least over the last 8, 9 months and the extreme social distancing on this took a backseat, right, because we could not get feet on the ground, we could not connect with kind of channel partners and hence there was a little bit of pause in the journey. But now we are again back to sort of having this kind of build upon. In fact, there are more than 10, 12 new initiatives which we are sort of working with. We have called this out, I mean, again in the past that General Trade is around a third of our business, whereas for other companies within Indonesia, this will be anywhere between 50% to 60% base. So it remains a great kind of growth vector. And also it's something which will result in kind of favorable impact on the margin. But it's more of a growth kind of initiative than anything else. But that's where we are, I mean. So yes, I mean, over last 9, 10 months. Firstly, I think also firstly, if I can add to that, thank you for the question. I think our portfolio also for GT has improved quite significantly in the last 2 years. And even say something like this, Basel for the long lasting paper and stuff, really GT is the market for it. So I think we have a better portfolio of products and this push now hopefully post the pandemic get stronger. Right. Which brings me to my next question, which is on the portfolio for Indonesia. You've launched Soap organically. What's your sort of medium term objective in Indonesia as far as categories are concerned? I mean, would you like to become a broad based diversified FMCG company in Indonesia? And if so, would it be largely organically? And also, which are the other categories over the next 3 years or so where you think it is adjacent or you have some right to go into those categories on your own or through an acquisition? Sure. Thanks. I think like we said, someone asked the question on M and A, so we would definitely and we are tracking other companies in Indonesia. So we would look at bolt on acquisitions for that business. I think organically, actually the categories that we look at are quite global also, correct, where we have some level of product and no house trend. So I think Basop is something that we sold quite successfully in India for many, many years. And we saw the opportunity at this time given some of the market shifts that we're seeing. I think we see hygiene both in home care and personal care as sort of very interesting categories. If you look at in what I mentioned in Sanita, what's doing early, well is sort of a disinfectant gum, freshness sort of spray. So I think things in the home care area, we already have HI, we have air care. We're looking at these other home care sort of potential between both Indonesia and India very seriously. We have fabric care in India. We have a bit of a fabric care business in Indonesia. So we look at scaling those businesses up. So wherever we feel that we have product differentiation advantage to offer the consumer, we would definitely look at those areas and build on our strengths. Hello? Percy, do you have any follow-up question? Yes, sorry. I just wanted to ask you on your hair care business. You launched 3, 4 years ago in Indonesia. What is the kind of success that you've seen there? And what percentage of the sales does it contribute today? So that business actually frankly this year has surprised all of us doing extremely, extremely well. And we've had good momentum there with sashayhaircolor. We're also launching shampoohaircolor there. So we see that as a good opportunity. It's also interestingly, it has quite a bit of a fashion business in Indonesia, not just gray coverage. So that's also definitely a good pivot of growth. Okay. That's all from me. Thanks and all the best. Thanks, Prathy. Thank you very much. Ladies and gentlemen, that would be the last question for today. I will now hand the conference over to the management for closing comments. Thank you, everyone. With that, we would like to draw this call to a close. Thanks for your participation and have a great evening. Stay safe and stay healthy. Thank you, everyone. Thank you for being with us. Bye. Thank you all. Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.