Marico Ltd

NSE:MARICO

Q1-2026 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to Marico Limited Q1 FY '26 Earnings Conference Call. We have with us the senior management of Marico represented by Mr. Saugata Gupta, MD and CEO; and Mr. Pawan Agrawal, Group CFO and CEO, International business.

[Operator Instructions] Please note that this conference is being recorded.

Before we get started, I would like to remind you that the Q&A session is only for institutional investors and analysts. And therefore, if there is anybody else who is not an institutional investor or analyst who would like to ask questions, please directly reach out to Marico's Investor Relations team.

I now hand the conference over to Mr. Saugata Gupta for his opening comments. Thank you, and over to you, sir.

[Saugata Gupta, executive]

Yes. Hi, everyone. Good evening to all those who have joined the call. I would like to start with a narrative on the operating environment during the quarter gone by, after which I will touch upon our performance and strategic objectives going forward.

During the quarter, we witnessed stable to improving demand trends in India across urban and rural. Premium categories continue to outperform the mass segment, while alternate channels like modern trade e-commerce and especially quick commerce continue to lead growth. While general trade also moved into a growth after some quarters as a result of focused initiatives, improved execution and the ongoing progress of Project SETU.

Looking ahead, we are optimistic about our gradual and broad-based recovery in consumption sentiment, supported by easing retail and food inflation, a favorable monsoon, increased government spending and higher MSPs.

Moving on to the quarterly performance. We have continued to deliver a sequential uptick in underlying volume growth in India, which is nearing double digits, backed by improving traction in the core aided by GT improvement and sustained momentum in our new businesses. Uptick trends have remained encouraging with nearly the entire business, either sustaining or gaining market share, and over 80% of the business sustaining on improving penetration. Revenue growth in the India business is multiyear highs as the strengthening volume trajectory was supplemented by pricing actions in core portfolios, taken in response to the sharp inflation in key commodities like copra and edible oil over the last 12 months.

Delving further into India business, I will now share some perspective on the performance of our key categories. Parachute has continued to demonstrate resilience amidst the hyperinflationary conditions in copra prices. In such hyperinflation, while consumption titration is typical, Parachute has exhibited minimal volume impact and consolidated its market share, underscoring its inherent strength in terms of pricing elasticity, and deep consumer trust despite multiple levels of price increases and MLH reductions amounted to an effective price increase of 60% plus.

After normalizing for MLH, the brand remained in growth territory during the quarter. We have delivered this growth despite consciously rationing certain low-margin volumes to protect brand profitability. During the quarter, the brand continued to gain share in modern trade e-com while pricing transitions are in fact quicker, and the new prices have already hit the shelves.

We understand that the unprecedented levels of inflation in this particular cycle has been due to the supply-demand gap created by a combination of crop yields due to an uneven weather patterns in the first half of 2024, and speculative activities and some unseasonal rains in May -- April and May, and the temperature fluctuation this year, which further extended this cycle and led to a sharp spike in April period where normally conversion starts but this year because of rains the conversions got delayed.

Principally, it is the inelasticity of certain sources of demand that accentuate the demand supply gap during such time whereas as you know, copra can't be imported. While the length and severity of this inflationary cycle poses short-term challenges, we have been able to hold on our ground and deliver stable outcomes on the back of pricing and enduring equity of Parachute. The brand has successfully navigated multiple hyperinflationary cycles, whether it's in 2014, '15, or over an 18- to 24-month cycle in '17 and '19 where we had also taken around 35% price increase and still delivered the delivered 5.5% growth in -- over a period of '17, '19, and a 6.5% growth in '14, '15.

The scale of our operations, coupled with resilient back-end capabilities and prudent inventory management continues to reinforce our competitive edge. That being said, we believe the kind market conditions are unsustainable and the copra market should settle down over the course of this fiscal, given the forecast of monsoons and the decent progress so far. In fact, prices have just come down around 12% from the highs in the last 2 weeks. As consumer pricing gradually normalizes, we expect Parachute to chart meaningful recovery in volume growth given our competitive advantage and such condition where the smaller players are out of the market.

Saffola Oils bounced back to deliver mid-single-digit volume growth which is in line with our medium-term aspiration. We expect the brand to be steady on a full year basis. During the quarter, we launched Saffola cold pressed oil range on e-commerce and quick commerce platform. This is in line with our purpose of the brand to be reinforce healthy cooking choices in Indian households and premiumize its play.

Value-added hair oil had a strong step-up in its recovery, led by sustained momentum in the mid and premium segments. The franchise gained 140 bps in value market share this quarter on a MAT basis. We are confident of maintaining a double-digit growth momentum in the franchise throughout the year on the back of sharper brand activation supported by our strategic pivot from trade-led investments towards brand building and therefore, increasing SOB, especially in the mid and premium segments along with enhanced direct reach to projects SETU, which invariably benefit VAHO.

The Foods portfolio scaled in line with expectations. The core Saffola franchise grew in double digits, while True Elements and Plix has plant-based nutrition range sustained accelerated growth momentum. We remain on track to deliver over 25% growth this year and over the medium term while steadily improving profitability.

During the quarter, we also expanded our Muesli range with 2 variants. We'll continue the innovation momentum and expand the TAM of Saffola to extension into relevant adjacencies. We have a clear path for each of the three food brands and see tremendous TAM expansion opportunities across the board, and some of it we have shared in the presentation for Plix and True Elements.

Premium Personal Care continued its strong growth momentum during the quarter led by the Digital First portfolio. The Digital First portfolio comprising Beardo Just Herbs and the Personal Care portfolio of Plix, exited the quarter with an ARR of over INR 850 crores, scaling up well ahead of our earlier targets. Given this trajectory, we are in -- we are on track to reach 2.5x of FY '24 ARR by FY '27. We continue to operate with a keen eye on the profitability and are striving to deliver double-digit EBITDA margins in this portfolio by FY '27.

Moving to our international business, we recorded high-teen constant currency growth, maintaining a stellar momentum. Bangladesh delivered a robust performance underpinned by broad-based growth across core and new franchises, while Vietnam had a muted quarter. Strategic intervention underway, expect a gradual recovery in this business in the quarter we had.

In MENA, the accelerated scale-up in the Gulf, Egypt continued supported by healthy traction in new franchises and sustained market share gains in our core and in the NPD. South Africa was flattish this quarter but we aim to achieving our full year growth aspirations.

To sum up, we have started the year on a strong footing with both India volume growth, overseas business, constant currency growth and the consolidated revenue growth trending positively and reaching multiyear highs. We firmly believe that we are in a virtuous cycle -- virtuous growth flywheel, I'd like to share a perspective on why we see it in that way.

Over the last few years, the CPG landscape has undergone significant shifts by macro events and evolving consumer behavior. During the COVID period, while categories like food, health and hygiene benefited from natural tailwinds, we believe it also brought a degree of complacency among CPG players, since the share of wallet was artificially shifting in their favor, given that the lockdown created situation where other expenses, whether it's out of home, whether things like travel, entertainment are not being done.

Subsequently, due to the inflationary environment following the Ukraine war, the sector delivered pricing led top line growth and A&P and other cost-led margin expansion. And some of them get rewarded. In emerging markets, however, we believe the core mantra for consumer companies must remain centered on driving volume-led growth, which is far more sustainable and enduring lever for growth.

We draw a lot of confidence from 99% of the business gaining our sustaining market share in India, which has happened after a while. We are consciously staying away from the track of optimizing margins at the cost of long-term brand investments. We've also registered steroid-based selling in organized trade and investing in below the line of price-led selling. We believe our resource allocation strategy over the past few quarters is paying off. We have also done significant SKU rationalization so that we believe in fewer, bigger, better.

We're also seeing the positive impact of Project SETU led initiatives in rural, and on mid and premium segments of VAHO. As we scale this up further in urban, we expected to capitalize growth in food and PPC categories like serum and male grooming. In addition to inflationary cycles being conducted to GT ROIs, our prior investments toward reinvigorating the GT distribution system have already begun to yield early wins with the revival of growth in the channel after a long higher hiatus. In addition, this high top line growth is helping an improvement of the ROI of our distribution partners after a long time.

Next, the scale-up of our digital brand has opened new frontiers for diversification innovation, offering avenues for accelerated revenue and profit growth in the medium term. Our brands are earning recognition with 3 of our digital brands featuring in the latest addition of the insurgent brand list published by one of the top GCs and the big three MDB management consulting firms. In addition to that, we have started the process of cost synergies amongst the digital brands as well as data synergy.

Coming to our strategic objectives for this year with high single-digit volume growth in India as our base case, we'll strive to deliver double-digit volume growth in some quarters. Supported a pricing growth, we will target around 25% revenue growth this year. While the pricing like denominator effect may suppress optical margin this year, we are not alone by the optical drop in operating margin and firmly believe this is a temporary high and not any structural concern.

We would think of this inflationary cycle like a onetime upheaval, which could in some categories, potentially approve business models. Although we are delivering sector-leading growth and moderate profit in spite of this high inflation, which is unprecedented and I believe exceptional. While delivering double-digit EBITDA growth this year may be somewhat of a challenge, we expect better visibility by the second half. That said, consistent with historical trends, moderate profit delivery in inflationary years, have been invariably followed by considerable profit accelerations in deflationary periods. And thus, we are fairly confident of delivering double-digit profit CAGR over the next 2 years.

We have seen cycles like this before, and each time, we have come out stronger. We believe that what continues to anchor us through these cycles is a resilient and experienced senior leadership team with collective experience over 140 years in Marico, and average leadership tenure of 8 to 10 years, that reflects deep institutional memory and understanding of various business cycles. Asish, who handles -- he's the CEO, India has been working with -- together, we have been working for 20 years, and Pawan has also been with us for 21 years. So between the combined three of us handling the business, we have around 63 years of combined experience in Marico. Over the last few years, we made significant investment effort towards strengthening our leadership depth, and we now have a solid GenX leadership in place.

Looking at the medium term, while the journey from INR 5,000 crores to INR 10,000 crores took longer, and we were not happy about it. There's a very fair chance that we could touch INR 15,000 crores over the next 2 years. Therefore, we also believe that the INR 10,000 crore to INR 20,000 crore leap can be achieved within the next 5 years if we continue to maintain this momentum.

Last but not the least, sustainability remains central to our strategy. A sustainability 2-point framework -- 2.0 framework is delivering strong progress across all key focus areas and moving up towards our 2030 goals. We are confident that our commitment to creating shared value will drive long-term sustainable and differentiated growth.

With that, I conclude my remarks. And thank you, and we are happy to take your questions.

[Operator]

[Operator Instructions] The first question is from the line of Abneesh Roy from Nuvama.

[Abneesh Roy, analyst]

Congrats on a very good volume growth, revenue growth. My first question is on the India hair oil business. So three subparts to that. First is the copra, how is the supply side now looking? And what kind of correction you see in the next 2, 3 quarters? That is my first sub-question.

Second is VAHO has seen a smart recovery after a few years of challenging times. The entire category for a challenging time. Now with the urban recovery being talked about by most FMCG companies, and rural continuing to remain reasonably robust. Would you expect VAHO volume growth to accelerate from here? That is the first question.

[Saugata Gupta, executive]

Let me first address your question on coconut oil. As far as copra is concerned, as I said, that the correction has started. We also need to understand that we being a significant buyer of copra, we have to also manage the entire supply chain assurance as well as pricing. We are now in a state where we believe we have much more control of the situation. Because as you know that copra and the overall coconut demand titration happens in these kinds of inflation. So the normal S&D imbalance adjusted itself because every consumption point gets tightened, right?

So -- and given our supply chain advantages and other things, our position building and all the rest, I think we are in a far more better control. So we believe that things are much better. And therefore, I don't see any further inflation at this point in time but we'll be able to give a much better kind of a feel in the second half. But as I said, that in spite of taking such price increases, we have actually in transaction terms still delivered a slight growth of 1%. And given the outlook on Parachute, we should be under control.

Coming to value-added hair oil. We took a conscious call in the last -- over the last 2, 3 quarters because we faced unreasonable competition where a lot of spend went from ATL to BTL in the bottom of pyramid, especially in Amla segment that we wanted to defocus, convert a lot. And what happens normally if competitive spend falls, you can maintain the same SOV at half the spend or -- we said that was a suicidal strategy. It was -- it doesn't make sense. So we had re-pivoted towards investing behind medium and premium brands, which makes certain margins that is working.

In addition to that, the first benefits of we are getting especially rural. Because whenever you do direct distribution, the second and the third brand distribution increases. And therefore, we are extremely confident of maintaining this double-digit value growth in the terms of the value-added hair oil business. And if you take ex-Amla, actually, the volume growth is double digits. And this is the high-margin part of the business. So you can understand this plus the food margin improvement and the digital margin, in fact, we've been able to hold on to margin in spite of this kind of unprecedented input cost inflation.

[Abneesh Roy, analyst]

One quick follow-up question here on the coconut hair oil business. Whenever we see such sharp inflation in FMCG and specifically in hair oil, we see local players kind of lower their intensity and presence in market. And obviously, copra has seen absolutely insane kind of valuation. So if you could talk about some of the local players in the core market? And similarly, on the consumption side because customer in India is extremely value focused. Have you seen any kind of a consumer change at the coconut hair oil level that some part is going to VAHO? I do notice your very resilient volumes but that could be a function of market share gain because the very big retailer, which I had a con call, annual call recently, they did say that in coconut oil, they saw a very sharp decline versus your almost flattish volume. So you have done quite well. But have you seen some section of customers shift to other hair oil and you have gained market share. So it's kind of getting hidden?

[Saugata Gupta, executive]

So I think as you know that our entire growth model is based on unbranded to branded, and letting market share from other smaller players in the coconut oil market. I alluded to two pieces of statistics in -- over in 2015, over 2014, we had taken a 35% price increase and we delivered a 6.5% volume growth in U.S. market share gain. Over '19 to '17, because it was over an 18- to 20-month period, the average price increase was again 35%, and we had delivered a 2-year CAGR of Parachute of 5%. So I believe that we should be able to hold on to the volumes.

There could be titrations. But all I can tell you that we are taking certain steps whatever in terms of our strategy, which will ensure that the volumes are not impacted. Yes, the smaller players and other smaller branded players will be far more impacted.

[Abneesh Roy, analyst]

Sure. Last question. On the international business, if you could comment three subquestions there. In terms of the Gulf and Egypt, what is happening 42% CCG? Is there some base effect? Is this sustainable on South Africa? What is happening there? Why you have not changed the full year guidance in spite of weak flattish number?

And Bangladesh, are you getting volume growth? My sense is the pricing growth in the coconut hair oil business there also will be quite sharp, of course, lower than India, given you do have import option there. How is the volume growth in Bangladesh?

[Saugata Gupta, executive]

Okay. So let me address one by one. As far as the Middle East, which is the MENA is concerned, the growth is being fueled by two things. One is growth in the core in terms of market share gain in our core businesses. As you know, that we never participated in VAHO. In Egypt, we launched VAHO in Egypt 2, 3 years ago, and then we have launched a full portfolio of VAHO in Egypt, which is how India has got Fiancée and we have got Amla.

Similarly, we have got an aggressive -- in distribution investments and also in -- we have launched shampoo in Egypt and Middle East. We have launched [indiscernible] and body lotions. So the NPD contribution has been significant and all the NPDs are doing well. As well as we are getting share in our core. So this last year also, we grew 30% plus, so this continues, and we are expecting -- we're able to have this accelerated growth in the Middle East because it's a very strong focus and investment market for us. Because the -- in terms of the opportunity or the headroom for both top line growth and we have also done this with a significant improvement in operating margin. So that we continue to reduce our dependence on Bangladesh for both top line and bottom line.

I think your second question was on South Africa. Sometimes in quarters, we do some certain area adjustment of strategy and all that. So we are pretty confident that we can start getting back quarter 2, and then we have a visibility of July, that we'll get it back on growth. And over the full year, we should be able hit double-digit growth, which has been all consistent this month.

Having said that, again, as you know, over the last 4, 5 years, we have outperformed the sector by a mile in South Africa and significantly improved profitability. So we have been able to prove that yet. We haven't made so much investment in South Africa or Africa. But with a very, very frugal, and a very efficient capital allocation, we have been able to give sector beating growth consistently in South Africa over the last 5 years.

Now coming to Bangladesh. Bangladesh has two components as the volume growth in the core. There's significant NPD performance. As you know, we have done very well, doing recently well in shampoo. We are doing well in baby. And there is some part of inflation and price increase in Bangladesh has been far lower because international copra has not got impacted so much as the Indian copra.

[Operator]

The next question is from the line of Vivek Maheshwari from Jefferies.

[Vivek Maheshwari, analyst]

Good to see results. First is on -- Saugata, on ATL versus BTL, what you mentioned. So at a consolidated level, I see your advertising spends have gone up quite a bit, about 25% but India business is actually down 20%. The absolute number is like lowest in the last 5 years, or let's say, 20 quarters. The percentage number, I know the denominator shifts quite a bit in your case but we have seen inflationary cycles in the past at about 3.5%. This is also the lowest number that at least I recall, or we have ever seen. Can you just elaborate more on this?

[Pawan Agrawal, executive]

No, you're right. Vivek. It's incorrect to look at ASP percentage to sales because of denominator effect. Having said that, yes, of course, there has been some cut in the India A&P but let me just tell you two, three broad contours for that. Number one, we have not cut in the focus categories of premium VAHO Foods and PPC. So these categories we have invested adequately. And also we -- Saugata also touched upon this fact that we've ensured that our share of voice is higher than our share of market in focus categories.

Secondly, in BoP in VAHO, we have definitely cut down due to competitive intensive -- competitive activity at the trade. And therefore, we have rationalized ATL expense towards consumer beneficial pricing in that segment. Additionally, I think in this quarter, we have cut down a lot of non-media spends, like we have rationalized the frequency of Nielsen subscription data. We have deferred some of the new filling shoots, which was discretionary and hence reduction in the utilization of elevated time cost. And additionally, we also extracted a lot of inefficiency out of media and non-media spends and hence getting more bang for the buck for the same dollar spend.

So these are some of the reasons because of which you see the A&P spends a little going down. But going ahead, we believe that A&P will trend upwards in India business. And of course, at a consol level, we continue to invest behind all the focus categories and new parts of the business.

[Vivek Maheshwari, analyst]

I see. Okay. So the..

[Saugata Gupta, executive]

In terms of media spend, there has been no reduction.

[Vivek Maheshwari, analyst]

Look, why do you say that -- sorry, because the number is just about like INR 85 crores...

[Saugata Gupta, executive]

Because all the cuts have been done on, I mean, non-media and production and other activities, what we have ensured that the media spend has not gone compromised.

[Pawan Agrawal, executive]

Media spends on the focus categories, in fact, has increased. For other part as I explained, largely because of non-media cut in some of the elements, and plus some of the non-focus categories, of course, we have cut down.

[Vivek Maheshwari, analyst]

Got it. Got it. it. And on the -- so when I subtract stand-alone from consol, the advertising spend over there is up 60%. I'm guessing the bulk of this will be on India business only and international movements will be relatively lower, right? Is that fair?

[Pawan Agrawal, executive]

Yes, you're right. So it is largely on the newer businesses, and also international business also has gone up but not to that extent.

[Vivek Maheshwari, analyst]

Got it. Got it. And the second thing is your comment in the press release, the way -- in the information update about the M&As. So what you mentioned in the existing geographies, or even a new geography. I'm guessing that is more in the context of international business that you're talking about. And you have done -- I would say, exceptionally well on the acquisitions that you have done in the Digital First D2C space in India. Are there still white spaces that you are looking at in India? Or do you think the platforms are ready, the brand platforms? And it is just more -- and you have also given in your release, the categories that you can expand into with the existing platforms. So how do you think about India acquisitions here on?

[Saugata Gupta, executive]

So actually there are one or two spaces, which are, I think, available still. See, we are clearly going into not only market attractiveness but a right to win, which are adjacencies. So we believe that there are one or two spaces which are available, whether it's in food or personal care. In addition to that, I mean, as you know, food is an interest for us. So therefore, we will continue to be still looking into these acquisitions.

Our track record for acquisition in terms of -- has been good. We now have a good playbook. And we also believe that we see ourselves as a strategic investor of choice because I think the kind of -- given that we are -- we have multiple brands, the kind of synergies and the kind of cost and the kind of knowledge, we can give and help founder grow his or her business is, I think, significant.

[Operator]

The next question is from the line of Arushi [indiscernible] from Macquarie.

[Avi Mehta, analyst]

This is Avi here from Macquarie. So I just had one question. On copra, I just wanted to understand the bit. How is current copra versus the sector average? Is it -- if you could kind of give us a sense? And based on that, would it be fair to say -- sorry, if you could kind of help first clarify that part?

[Pawan Agrawal, executive]

We didn't get the question.

[Avi Mehta, analyst]

Versus sector versus 1Q average -- sorry, sector -- quarter average. I'm really sorry, 1Q average. Is it ahead of that? Is it below that? How would it be just to -- copra cost.

[Saugata Gupta, executive]

Yes, it's 12% down in the last Q. So that 1% or 6% was for the quarter. But yes, if you take a point today, it's 12% down in the last -- from the peak.

[Avi Mehta, analyst]

From the peaks. So from the sector average, it will still be down. That's the correct understanding? Sorry, I'm again, I'm sorry, from the 1Q average, it would be down. That would be the right understanding? Copra...

[Pawan Agrawal, executive]

I think [ copra ] levels in quarter 1, it went up further in July, and now we are seeing about 10% to 12% correction from the peak that we have seen in July. And again, sort of link it back to the point, which Saugata had mentioned earlier, we do not see any further pricing actions at least given the recent trends that we have seen in the copra basis.

[Avi Mehta, analyst]

Okay. Got it. So just a clarification. It would be fair to say that whatever was the 1Q EBITDA growth, the growth logically should kind of improve as we go forward, given that VAHO is improving, given that you're seeing? Is that a fair expectation to...

[Pawan Agrawal, executive]

It is difficult to give quarter-on-quarter guidance, Avi. In fact, Saugata touched upon his opening commentary that while we have given a double-digit profit growth guidance earlier, in the current scenario, it looks a little challenging, but it will still strive for high single-digit growth in this year. But typically, what we have seen is that inflationary year gets followed by a deflationary year and we have been able to make up for more than what we could not do in the previous year. Therefore, from a 2-year perspective, we are fairly confident that we should be able to deliver double-digit profit growth.

[Saugata Gupta, executive]

The only thing I also added alluded to just wait and watch in the second half. See, right now, as I said that, yes, double digit looks challenging as of now but you never know. See, I mean 3 months ago, I never could have predicted copra prices.

[Avi Mehta, analyst]

No, no, I understood. So except copra, there's nothing that I have to...

[Saugata Gupta, executive]

As you know, we never give up like the Indian cricket team till the last ball. Also we will not give. We'll be like the Indian cricket team.

[Operator]

The next question is from the line of Mihir Shah from Nomura.

[Mihir Shah, analyst]

Firstly, on Parachute, just one small clarification. In the press update, you highlighted that there is a consumer pricing of about 60% in the press note. And that translates to closer to about 30%, 31% for the quarter. I wanted to know after this 31%, what is the incremental pricing that you have taken that has yet to come through in the numbers?

[Pawan Agrawal, executive]

So we have taken additional 30% price increase in quarter 1. We don't intend to make any further price increase as I...

[Operator]

I'm sorry to interrupt, sir. Mr. Shah, could you please mind muting your webcast line? There is a follow-up.

[Pawan Agrawal, executive]

So the full effect of this price increase will be visible in quarter 2, where the value growth probably could be even higher on the Parachute franchise. But again, from quarter 2 onwards, or later half of the quarter, we'll also start anniversizing in the base. Say in H2 year pricing growth will progressively come down from the peaks of quarter 2.

[Mihir Shah, analyst]

Understood. After such sharp price increases, I mean, historically, I don't think I recall much price declines in Parachute, maybe in '17, '18 and thereabouts. But how confident are you on the volume growth front you sustained in this quarter. But does this kind of price increase put significant pressure on titrating for consumers? Can one expect a sharper decline on volumes in Parachute, or not really?

[Saugata Gupta, executive]

No. So I think there are two things. One is, obviously, we will take steps. Now I'm -- and I can't get into details of what are the steps we will take to ensure that protecting some of the packs, which are much more sensitive to pricing, we are taking steps. Secondly, as I told you, is that during such times, the small players are really in terms of -- they are really stretched in terms of their presence. Also, some of our branded large competitors who have been doing some, what I call unreasonable kind of pricing, which had -- which was lost last year, I think we'll not do that. So I think there will be market share gains.

So combination of that, we'll be able to hold broadly the volumes. I don't see any reason to be stressed out. And I think the other thing is that what I believe is going to happen is that the peak has been reached. And therefore, as we go towards the second half, I think there will be a little bit of stability as far as pricing and other thing goes.

[Mihir Shah, analyst]

Secondly, on VAHO, is a great set of numbers after such a long period of time. Is there any element of channel filling, or is largely Project SETU that is driving this? What is the core driver for this and sustainability of this? I know you mentioned that you were trying to do double digits but just wanted to check on that one.

[Saugata Gupta, executive]

I think we are -- very, very -- we have a very high confidence level on sustaining double-digit growth in VAHO. And two things. One is that, as you have seen, we are seeing also a significant increase in market share. See, what happens is that normally, wholesalers take a high-velocity items. So to give you an example, a Parachute or Shanti Amla will be a natural theme of choice, which will go through the wholesale system or the indirect sales system.

Now that we are over a 3-year period, adding 0.5 million set of outlets, we invariably -- it is the second or third brand that goes into the brand selling. And that is the advantage we are getting. So therefore, we are not only taking share from the organized player, we also be taking share of some of the smaller players. And the second thing, which we are doing is that because we have said that I am not going to get into the BTL fight at the bottom of pyramid but invest behind equity building. We are significantly investing behind equity building, which is also -- that means that our share of voice is increasing and investing behind because it's my job as a category leader to drive category growth. So we are fulfilling the job, which we had advocated because of we were trying to fight at the bottom of pyramid. So it's a combination of that.

And as I said, the biggest -- VAHO obviously, we haven't taken price increase majorly. The biggest thing, which illustration of the fact that you could take out Shanti Amla from the equation because we are not getting into this PT-wise BTL, or whatever you call it, case-wise BTL fight, which is, I think, very [indiscernible]. Out the volume growth of the other brand, which is brands like Hair & Care, Jasmine, Aloe, Ayurvedic, they are actually double digit for the first time after a lot of quarters. And we expect this kind of a trend to be maintained.

[Mihir Shah, analyst]

Fantastic that is heartening to hear. Lastly, if I can just push in one more on margins. I wanted to understand how should one think about margins in the near term with this kind of inflation? Copra -- sorry, VAHO is margin accretive category, if that goes by double digits, while the kind of pressure that you're seeing from copra. When will this converge? And when can we start seeing margins starting to expand? Can it be like in 2 to 3 quarters? Is that a fair understanding?

[Pawan Agrawal, executive]

So see from a margin percentage standpoint, very honestly, it's very difficult of gauge because there's multiple moving parts in terms of the commodity inflation price increase that we have taken et cetera, et cetera. But as I mentioned earlier, in this kind of inflationary scenario, what is important is look at the profit growth. Because margins will definitely look compressed because of the significant denominator effect. And as you would have heard Saugata said that we're expecting even higher revenue growth going ahead. So therefore, margin percentage guidance is difficult. But yes, we hold on to what I just said a while ago in terms of the profit growth.

[Saugata Gupta, executive]

And as I said, again, reinforcing let us wait a quarter because situation is volatile. We have far more control on volume growth, revenue growth, I think on the margin, it will come. And as I said, that I -- we strongly believe in emerging market volume growth is important. So if we can deliver in some of the quarters going for a double-digit volume growth, automatically, margins will come next year in terms of a 2-year basis, it will be healthy margin growth. I mean, there's no reason to be concerned at all. I mean one or two quarters is fine but I don't think any power plant globally can -- has taken these kind of price increases and actually are also hold -- held volumes.

[Pawan Agrawal, executive]

And we've seen in the past that any compression in margin in a particular year has been supplemented by a significant expansion in the subsequent year. So that will play out as we move along to FY '27.

[Operator]

The next question is from the line of Percy Panthaki from IIFL Securities.

[Percy Panthaki, analyst]

My question is on the Parachute segment. So you mentioned that now there is like a 60% price increase on Parachute. We have seen inflationary cycles in the past but I don't think we have ever taken a 60% Y-o-Y pricing in Parachute. So in light of this, I know you said you will take measures to protect volume but in light of this, do you think it is possible that with a 60% pricing volume might touch a negative double-digit kind of a number? Or you think that that's out of the question, it can't get so bad?

[Saugata Gupta, executive]

First of all, I think it's 60% is a point-to-point. And as Pawan alluded to, as we move towards second half, this number will go down drastically. It will go to another between -- if there is no pricing action, anything between 46% to 35%. And I think I gave you some piece of statistics that in that twice in the past, we've taken 35%. That time, India might have been the 11th largest economy. Today, we are far bigger and the aspiration and this one.

Number two is this 60% is a 1 quarter phenomenon. It's not a 2-, 3-quarter phenomenon. And as I said, that there has been a stabilization that is happening on the copra prices from the peak that -- this kind of a demand -- the supply demand, this one was also something, which was a function of some speculative also function. It is not a structural major issue. So it will get sorted out. Now obviously, we'll only see a proof of this one after the quarter happened, the second quarter. But we don't see -- we are not unduly perturbed by this one, there could be volume pressure here and there. But I mean, that double-digit, this one is not a -- it's a doomsday scenario, it's unlikely to happen. I don't think anything like that will happen.

[Pawan Agrawal, executive]

So let me just add one thing. I am confident nothing of that's what will happen. In fact, in this quarter also, if you adjust for MLH, it is 1% positive growth. And also this is despite taking certain calls of rationalizing the supply on certain channel SKU combination because that was very low margin. So we took a very conscious call in terms of not supplying to protect margins. So therefore, we are absolutely confident that there won't be a scenario where we'll have any major decline. In all probability, we should be able to deliver growth adjusted for MLH.

[Percy Panthaki, analyst]

Got it. And secondly, just wanted to understand the drivers behind the copra price. What is the reason that the inflation is so high and even like -- even taking a slight moderation from here, it would still, for the full year, remain much higher than what our original estimates were. So what led to this basically?

[Saugata Gupta, executive]

I think I talked about in my opening commentary. So what happened was there was a slight drop of productivity in the coconut, this one about around 9%. Now what happened was that some of the demand, as I talked about, that coconut which is used for consumption, coconut, which is used for religious purposes. Those initially, they are elastic. So the copra thing is an end of that entire supply chain.

Now therefore, that led to -- and also what happened is there were some unseasonal rains and -- which was in April, which led to copra. Copra needs dry weather for conversion. That conversion cycle got delayed. And since all the other demands were met with a certain pricing, the availability for copra -- availability that was further shrunk. Because when you had a 9% overall productivity drop, if the other things have done at a certain level, copra that availability was shrunk and that led to some speculative activity.

I think now what has happened is given all the pricing automatically demand rationing has happened. And the result, what we are seeing is that as demand rationing starts happening, we are seeing the first signs that we are still in season. See, the season continues till September. So we don't have a problem in terms of -- so our first job was to also ensure that we have supply assurance. So therefore -- and now we will -- we believe that we have far better control of the situation as of now.

Now going forward, yes, I think the overall full year copra will still be high but at the same time, sequentially, copra prices are expected to now go down unless there is again some other Black Swan event or something, but directionally. And what happens is that if you see inflationary cycles are invariably followed by a deflationary cycle because what happens that demand titration happens. Also the rains this time are good. We -- our first idea about the crop is also decent. So we believe that they will be followed by a deflationary cycle.

[Percy Panthaki, analyst]

So when you're seeing productivity is 9% down, does it mean that the crop itself is sort of 9% down? What exactly does it mean?

[Saugata Gupta, executive]

Broadly, yes, yes, yes.

[Percy Panthaki, analyst]

Okay, okay. And this is because of some seasonal vagaries that the 9% has got affected? Or what is the underlying reason for that?

[Saugata Gupta, executive]

Combination of temperature and -- temperature, unseasonal rain, or as a function of that.

[Percy Panthaki, analyst]

Understood. Understood. And this VAHO, basically, you're focusing more on the mid-and premium because you think that the lower end doesn't really make profit. But what we have seen across many...

[Saugata Gupta, executive]

We have -- I think it makes profit. But it doesn't make as much profit as of this year.

[Percy Panthaki, analyst]

Correct. Correct. So we have seen across many segments that consumption is under a huge amount of pressure. And in this kind of a scenario, basically, the consumer is willing to go for cheaper alternatives. You have seen that in multiple categories in the consumption space. So while your strategy is sort of good of focusing on the more profitable part but do you think this is the right time to do that?

[Saugata Gupta, executive]

I don't know why I've not noticed -- see, first of all, the indexation of RPI is not that massive. So what we said is, even in VAHO alos, what we are not doing is in brands like our Amla category, not focusing on BTL, that doesn't mean I'm not going to invest behind Shanti Amla mid and large packs, okay? It is about that 10%, 20% price point BTL-driven strategy.

Once we have now got the rest of the things, I will again -- anywhere I might invest in Amla also and grow the category. What we are saying is we don't believe that by converting ATL to BTL, that is basically -- that doesn't necessarily lead to consumption. The question is, if I get 10%, 20% BTL, am I getting increased uptake? I am -- my hypothesis is that increase in BTL doesn't give you take long-term offtake. Not that I am taking price increase in Amla, all I'm saying is I'm not buying volume by doing BTL. That does not mean that that consumer will stop buying because Marico has stopped giving BTL to the wholesaler.

[Operator]

The next question is from the line of Aditya Soman from CLSA.

[Aditya Soman, analyst]

Sir, two questions. Sir, firstly, on VAHO, what would be the volume growth? I mean you indicated that it's sort of double digit excluding Shanti Amla. Including Shanti Amla, would it be the low single digit?

[Saugata Gupta, executive]

No, it will be slightly more.

[Pawan Agrawal, executive]

Mid-single digits.

[Aditya Soman, analyst]

Mid-single digits. And so that effectively means that volumes for the non -- or the bottom -- I mean, the remaining 30% of our portfolio other than Parachute, Saffola and VAHO would be sort of north of 25%. Would that be the right rate to get to you to the 9% overall volume?

[Saugata Gupta, executive]

We don't want to get into this one. All I can say is that we have indicated that Saffola is mid-single digits. We would not get into individual category-wise growth. But yes, the premium part of the business, our diversification of the business would be higher growth.

[Aditya Soman, analyst]

I understand. No, that's very clear. And then just lastly on just this VAHO bit again. So your -- one of your competitors on their call, they mentioned that they have gained probably the most market share in their oil category, and obviously, they compete in Amla. So would that be the right influence that they are gaining market share because of BTL or whatever?

[Saugata Gupta, executive]

I can't comment on in this one. We have gained 150% -- 150 bps value share. We focus on value share.

[Operator]

The next question is from the line of Nihal Mahesh Jham from HSBC Securities.

[Nihal Jham, analyst]

Congratulation on [indiscernible]. Focusing on the foods business, there has been a slight moderation from the 40% growth you saw in Q4 to 20%. So any specific parts you want to highlight on that?

[Saugata Gupta, executive]

I think, see, there's a quarterly basis happened because last year, there were some launches, which happened. So I think we are fairly confident about 25% plus growth in the food business. Sometimes, this fluctuates because, as you know, it's not still a INR 900 crore plus business. So sometimes fluctuations happen. There is nothing to be worried about. Two things we look at. One thing we look at is that the core of the food, which is the Saffola oats, Masala oats and honey and all, are they growing by double digit. Yes, they're growing by double digits. Sometimes, because there is some part of two elements, some part of Plix, it fluctuates. I don't think there's any cause for concern. Maybe 40% would have been a slightly higher number because we have been always been talking about a 25% kind of a growth, 25% plus growth.

[Nihal Jham, analyst]

Second is on the profitability of the foods business itself. In case of Personal Care, you've given this outlook of double-digit EBITDA. Now I guess the foods, you mentioned that you expect to see a gradual improvement in the gross margin from where you've already reached. But just fair to speak in terms of the EBITDA profitability, what will be the aspiration, say, similar by FY '27 for this part of the business?

[Saugata Gupta, executive]

So I think two things. One is, as far as the oats plus masala oats, the core of the business is concerned, which is a concerned, which significant one, we are almost touching the company EBITDA. Now what we have realized is that as long as you concentrate on value-added part and this one at a, at a breakeven, say, any category at 150 to 200 and we hit 300, 400. So our objective will be to get some of these categories into that.

Having said that, quite separately, I think over the last 2 years, we've improved gross margin by 1,000 basis points. It's still a work in progress. We need to continue to do that. And I believe that what we actually look at is the blended gross margin of NPD versus your current portfolio. The blended gross margin of our NPD is higher right now than our current portfolio, and this will progressively move up.

[Pawan Agrawal, executive]

Also just to add, Foods is also a low A&P model, low gross margin, low A&P model. And therefore, at a net contribution level, it won't be very, very different. Once it reaches a particular scale, then to reach to a company, EBITDA is not much of an effort because it's a low A&P model.

[Saugata Gupta, executive]

And also continuing on that, we are using the Saffola master brand and getting the amortization of the spend. So you have to look at from a Saffola master brand, Saffola Total, this one is the net contribution terms.

[Nihal Jham, analyst]

So just quickly one last question that the INR 20,000 crore number you've given by FY '20, just more clarity in terms of the different segment contribution. You mentioned Foods and D2C, 25% by '27 but just more clarity on the statement you made in the annual report.

[Saugata Gupta, executive]

So I think we can't get in...

[Pawan Agrawal, executive]

Very difficult to give a exact breakup of that INR 20,000 crores. But the idea is that on all the core categories, we've given some guidance. For example, let's say, we're talking about food, 25% plus growth, Digital First business 25% plus growth. VAHO we are expecting to deliver double-digit growth. A combination of all of these plus, of course, international business, we also expect mid-teens kind of a number. With the combination of all this, this INR 20,000 crores can be achieved.

[Operator]

The next question is from the line of Harit Kapoor from Investec.

[Harit Kapoor, analyst]

I just had three questions. One was on SETU. So it's almost 1.5 years in your 3-year journey. Just wanted to get a sense of how much of the 500,000 direct would we have broadly covered in any target for this year?

[Saugata Gupta, executive]

No, no. So I think while -- to be honest, while we kicked off SETU some time around 1.5 years ago but the impact started because we were prototyping the SETU things. So I would say that we are seeing the first signs of growth of SETU. And you will see perhaps better impact of SETU as we go into the second half of the year. There are two parts of it. One is the rural direct reach where we are not only doing direct distribution but also converting some of our indirect to direct using far more technology and getting a control of it better ranges. The second part of the SETU will be also in urban, where we will increase our presence in food specialty stores, cosmetic as well as chemist, which we will unfold as we go.

So you will start seeing -- so this will lead to two things. One is, you will certainly see a GT improvement in GT growth as we move from quarter-to-quarter. In this process, while we said it 3 years, I would knock off the first 6 months because we were trying to get the model right. So I would say 1 year, there is 2 more years to go. But we are pretty confident that what we have achieved in this is 2 things. One, we believe that the long-term sustainable competitive advantage for incumbents, or large players in the FMCG sector is strength in GT.

GT is not going to vanish overnight, okay? So therefore, while we get short-term sales in by investing in OT, what we have said that our -- it is in our interest to ensure that our distribution system in terms of ROI stability stays continuously in control. We are the first to call about this issue of GT and we have -- that's why we started this SETU. And the second thing it will start doing is we'll be able to do range selling. And tomorrow, some of the digital brands once they hit a certain critical mass, create a specialized GT channel, say, top 10,000, 15,000 food outlets, or the top 10,000, 5,000 beauty stores at the top 10,000 chemist. So that's -- the other thing, which we are not even leveraged yet. That will be phase 2B of SETU.

[Harit Kapoor, analyst]

Got it. Got it. The second question was on VAHO. Given that the non-Amla brands have grown double digit and clearly share has come from those brands. Just wanted to get a sense of who are the players that -- or which are the type of players that we've been successful in gaining share from -- the question, essentially, if you look at it a few years back, you'd also had certain D2C led players in the premium space who came in and took up some space there, created certain brands there. So is some of it coming from there as well that as you are expanding your reach, customers coming back to the umbrella brands? A little bit more color on that. That's all.

[Saugata Gupta, executive]

I think near distribution of placing a product doesn't lead to market share I'm alluding to some D2C brands, okay? And I don't think we can capture them at all. So whatever share we have got would have a share from large organized players. So I don't think there is any -- this one on D2C players, this one. And as I said, that I think the biggest gain has come because of our SETU, which is involved in direct distribution, availability, weighted distribution and secondly because of the fact that we are now investing behind this -- some of the brands, it is leading to overall brand preference.

[Harit Kapoor, analyst]

And lastly, in your presentation, you did -- you had a slide where you spoke about the INR 900 crores to INR 2,000 crore journey for the four brands in the digital space. Is this pertaining to digital-first brands overall, or it's pertaining to these 4 brands in the journey, you see these 4 brands going over the next 3 years? Because I just want to know if there's an acquisition element to that INR 900 crores to INR 2,000 crores also?

[Saugata Gupta, executive]

No. So I think as of now, it is the full brand but we'll be happy to acquire some and ensure that this number will definitely achieved or crossed. But what I -- just to add that we also alluded to in this chart, is that what is the potential TAM expansion for each of these four brands.

[Operator]

The next question is from the line of Arnab Mitra from Goldman Sachs.

[Arnab Mitra, analyst]

Congratulations on a great quarter. My first question was again on the digital brand. So you've given this enhanced aspiration of 2.5x and also margins going up sharply. Your chart shows a significant jump from where you are today to '27. So now what we've seen in other digital companies sometimes is both the things don't happen together. If you try to pull the margin up, it does affect the growth rate at least to some extent. So are you -- what's giving us the confidence that you can do both, which is scale up the top line, but take up the percentage margins in some of these businesses?

[Saugata Gupta, executive]

Okay. I think I covered this Arnab last time. There are two cohorts. In terms of Beardo and Plix, they have broken even. In fact, Beardo is close to double-digit EBITDA where Plix has broken even. They now on an accelerated growth path. And obviously, they will have because of cost synergies and scale synergies will continue. So to -- in order to make them grow at an accelerated this one, I don't need to burn. Actually, my EBITDA will also increase.

As far as just Just Herbs and True Elements is concerned, we are okay with moderate growth and get a path to breakeven within the next 18 months. The biggest one, which I think we have a unique opportunity is that all these brands have access to the entire Marico cost structure, whether it's procurement, whether it's supply chain. Now, we look at another example of digital media buying because we are going to buy one Marico digital buying -- digital media buying. All these are structural cost savings with a stand-alone digital brand will never have access to.

And those other things we are tapping. For example -- I'll give you an example, Beardo we in-source 1 or 2 of the hero SKUs into our own manufacturing system, which straight away got a 500, 600 bps improvement in gross margin. We're starting that process now.

[Pawan Agrawal, executive]

Just to add, there are two broad levers. One is, of course, the back-end synergies, which Saugata spoke about. And second is also with the scale, operating leverage will kick in. Now the businesses are becoming sizable. And therefore, let's say, overhead et, cetera will have an operating leverage. So this is giving us the confidence that even operating margin percentage will improve. And again, we have a job to do in Just Herbs and True Elements, which we're expecting that we should soon move to breakeven and therefore, the overall digital cohort, the [indiscernible] margin will happen.

[Arnab Mitra, analyst]

Just one follow-up on this. I mean, so what we've seen again in some of the other digital brands is that this advertising spend, which tends to be a really large cost in these businesses, they almost become like a variable cost because it's performance marketing, which is almost variable. So are you saying that in your case, the way the P&L of these brands, look, there is actually going to be decent operating leverage on advertising, which I assume would be a really large percentage of sales at a early stage than the brand is scaling up?

[Saugata Gupta, executive]

So let me give you a construct. As far as advertising is concerned, a good digital marketing leads to lower OS. Number two is -- the -- if you look at, say, D2c part of the business, as long as the AOVs are high, and your digital marketing spends are better, you actually get a better profitability. The second thing that happens is that we also believe that it's just not about performance marketing but also platform spends that needs to also drive. And as I told alluded to that given it is a one Marico off-platform spend efficiencies are far better than stand-alone brands.

So unlike some of the stand-alone brands, we are also getting economies of scale as far as 2S is concerned. And as you look at it, it's not that we make super open gross margin be of the fact that at anything between INR 250 crores to INR 300 crores level, I can make double-digit EBITDA. It proves that our cost structure can be manageable. And as you know, I think we -- it was mentioned, I think in my opening remarks, recently there is a study done by GC and in partnership with the MDB consulting firm on infurgent brands. You will notice that not only our brands are high growth are also extremely capital efficient.

[Arnab Mitra, analyst]

Got it. Got it. And my last question is actually on the copra that where copra prices today are? How much do they have to drop then before you have to start taking price drops? What I mean is -- I mean, till where have you priced copra on a broad-based basis? Do you expect second half they maybe need to take price hikes? So give us how much the cycle has gone up even if it comes off, let's say, 10%, 15% from here, you may not need to take price corrections?

[Saugata Gupta, executive]

So it all depends on the situation. What we will do is we will always balance volume and margin. I think -- and we now have a broad pricing model, which has been developed with around 15 years of data. So we will not be greedy about margin. At the same time, we believe that usually, the discretionary cycle, we have been able to increase our margins.

[Pawan Agrawal, executive]

I just want to call out one thing, Arnab, that our vulnerability towards copra price fluctuations have come down over the years as we pull multiple levers of margin expansion that we've discussed over the call in the last 1 or 2 quarters. For example, food gross margin or digital business margins. In fact, driving VAHO growth through mid-and premium segment is also helping us drive up margins with a better mix. In fact, rapid scale-up of premium portfolio in international business, scaling up of a smaller business units and international business. All these are additional profit levers and therefore, our dependence on copra as a lever of profitability has come down and will keep going down over the next few years.

Just to share a number, the dependence on Parachute and Saffola for profit has gone down by approximately 1,000 basis points over the last few years. So therefore, we are not that much vulnerable now as to copra and edible oil prices now as we used to be, let's say, a few years ago.

[Saugata Gupta, executive]

And I think if you really said that as -- if VAHO keeps on growing double digit, your digital businesses grow and all that. So this number will progressively even this year will get less impactful. So it's fine. I mean, yes, it's something which is -- has been something unprecedented but it's not giving us sleepless nights.

[Operator]

Ladies and gentlemen, we will take the last question for today, which is from the line of Nitin from Emkay Global.

[Nitin Gupta, analyst]

So my questions are around the copra prices. So there is a drop of around 12%. So based on the previous answer, it seems like we are not going to take any price cut right now. And we will look to balance.

So the other 2 are around -- there was a solvent extractor press release, which talks about pest attack hurting yield of sort of copra. So is there any such concern for this year? And second is around, is it like an import of copra is banned in the country? So can we import finished goods from Bangladesh?

[Pawan Agrawal, executive]

No, we cannot import either copra or oil. We can only import to the extent what we can export. Now the representation from is an independent industry body. So again, we do not have such information of that pest, et cetera, damaging the crop in a wide-scale manner. Yes, there could be some limited impact. But again, it's an industry body, which does represent the industry as a whole.

[Saugata Gupta, executive]

So just to add that, as I said, that the drop has been not major at to 9%. It happens in any crop. And whatever little visibility we have is there is no additional concern as we go into next year.

[Nitin Gupta, analyst]

No, this is reassuring. Second, in terms of like the long-term path you have discussed in the annual report around doubling revenue by 2030. So this implies around mid-teens sort of growth ahead. So would you be able to highlight like how much of the business like we are expecting from organic business and inorganic?

[Saugata Gupta, executive]

Yes. I think when we talk about the 5-year number, it's an aspiration. We now put the building blocks in place to do it. It's very difficult to say inorganic, organic. We don't -- we have -- I have never believed inorganic to be a substitute for organic growth. Inorganic is always an accelerator. And therefore, for us, we will always make -- and in today's uncertain world, always there has to be a plan B and a plan C. So I don't see any inorganic component that kind of a plan.

The way we said is that, I think given that we have started the -- a year on a good note and the building blocks in place of diversification, getting VAHO back into double-digit value growth, International business getting into teens. I think our ability to deliver kind of a 15% -- 14%, 15% which takes us to that is possible. I think this year, we have talked about a 25%, around 25%, which accelerates. And that's why I told in the opening commentary that in order to secure that aspiration, we will try and attempt to hit the first -- I mean, to move to 15,000 in 2 years.

[Operator]

As that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.

[Pawan Agrawal, executive]

To conclude, we've had an encouraging start of the new fiscal, having delivered robust growth and resilient margins in both India and international business, despite facing unprecedented levels of input cost pressure. In India, there are clear signs of gradual pickup in the core portfolios, while the new businesses play their part of accelerating growth.

International business has been a consistent growth driver and we intend to further solidify its double-digit growth trajectory over the medium term. We are fairly confident of maintaining the strong volume and revenue momentum in the quarters ahead, while tapping multiple levers at our disposal to effectively navigate transient inflationary pressure in the immediate term. We will continue to prioritize driving the sustainable and profitable growth construct for the medium and long term.

That is it from our side. If you have any further queries, please feel free to reach out to our IR team, they'll be happy to address. Thank you, and have a great evening.

[Operator]

Thank you, members of the management. Ladies and gentlemen, on behalf of Marico Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.