Hello? Am I audible?
Just wanted -- given the inflation backdrop, I just wanted to understand the thought process of working, which has gone behind 2% price hike. Just trying to understand why not 4%, 5%? What are the limiting factors or the thought process that goes behind this?
Hi, thanks for the opportunity. And I have joined a bit late, so sorry if this question has been asked in any form before. Sir, we are now at the scale where macro trends dominate performance. And then we are seeing this in many other category leaders also across consumption space. Now one possible solution that we have seen off late is that to create a portfolio organically or inorganically within the larger portfolio of low index categories or brands. Now since the brand vector is not with us, brand extension is the only lever that we have. And we have done many launches also in past with perhaps not with this mindset alone, but we have seen in many category extensions. So are there any bright spots in the portfolio clearly outperforming the average? And when you do the sum total, you can say that 20% - 25% of our overall portfolio is growing way above what the company is today delivering number.
Yes. And sir, JKY Groove, though it is actually kind of extension of what we just spoke about, but launching it just in 50 EBOs and only in our portal, what markers will actually give you confidence from such limited launch actually will give you confidence to roll it further? And just wanted to know that is it like targeting a certain category of audience at the price point, because I was just looking at the site, it is largely priced below Rs. 1,000, and with some fashion risk element also in the product line. So broadly, just wanted to understand your view on here.
Congrats on a good set of numbers. So just wanted to know in a very tough environment, we have been able to drive a very strong premiumization. So I was just wondering what click for us? Was this a product mix change or channel mix, which contributed significantly?
Got it. Second, listening to -- hearing your commentary so far, you seem to be very confident on revenue growth, premiumization, gross margins. Then do you see an upside risk to your margin guidance on '19 to '21?
Thanks for the opportunity and c ongrats on a good recovery, especially in the current environment. First question pertains to growth. Just wanted to understand the character of the growth here in terms of how it is composed across regions or segments, if you can give some qualitative inputs. Especially the headwind that we had seen in athleisure, are we seeing some sharp recovery there?
And the gap that we had seen in the recent past between primary and tertiary, do you feel that it's almost, by end of this fiscal year, we should start kind of so that won't be part of our discussion or narrative anymore because all the ARS intervention that we have made in the recent past, the effect of the same will be surfaced by end of this year?
Hi. Thanks for the opportunity . Sir, f irst question pertains to what specifically weighed on growth on the seasonal portfolio this quarter, and how soon we are confident to go back to the stronger trajectory because the last year base is also a weak one for this part of the portfolio?
Okay. Because summer actually picked up a bit late, but it became stronger. So are we seeing - already seeing benefits of the same or the season has gone. So again, for this year, we should not count that now?
Hi sir, thanks for the opportunity. Actually, the first couple of questions are around the quarterly numbers. So how did the organic volume and value growth trend this quarter? And employee costs seem to have some inflation in this quarter. So, any one-off or should we consider this as a new run rate?
Perfect, sir. Very clear. Sir, EBITDA margins on an annual basis have improved after a gap of 4 years on a Y-o-Y basis. So, first of all, congrats for that. But is there a sustainable shift here? Or any guidance would you like to call out at this point?
Rakshit, on the strategic pillars that you have called out, and you partly answered the question, but the hallmark of Britannia for the last 10 -plus years was relentless focus on cost efficiency. And then that consequence was margin expansion. So, the sense that I got from your commentary so far is that we have reached a scale where we need to reinvest in brands and operations. So, should we say that the band that we are currently is a very comfortable band, and from here on, the nonlinearity that we saw past decade wouldn't be at least in the near future?
Okay. And then just the extension of the point that you made, and that's a part of the strategic pillar also, that innovation adjacency and future platforms. So should we interpret that Britannia will be adding more platforms? Or we believe that because th is ambition has been there for a while but scalability has not come through, so all the adjacencies that you need are already on the table? Or you'll add more platforms in terms of expansion?
Sir, across industry, we are seeing strong traction in health, nutrition, wellness -led launches, especially on D2C and quick commerce. And interestingly, on the previous answer, you also called out that quick commerce and modern trade is an opportunity, which is under-indexed. So do you see any portfolio gaps or opportunities for us in this space? And especially like, let's say, something like SuperYou, if you saw, those brands are getting immediate traction on wellness platform and in quick commerce channels. So just wanted to understand your perspective on this.
And sir, last quarter, you had called out certain distribution reforms to increase volume per output. So just wanted to know where are we? And are we seeing any tangible outcomes already on that?
Varun, your decade-long cost saving discipline has been exceptional across FMCG. But at some point, do efficiency gains start to taper off? And is there a risk of cutting into growth -linked spends in pursuit of savings?
Got it. Second, we have done fabulously well on quick -commerce as a channel. Just wanted to know how do you see it in terms of margin accretion and working capital discipline in overall scheme of things?
Sir, yesterday, ITC in its press release highlighted intense competition from local players in biscuits, but market continue to expand this quarter as well. So what are the key drivers that are working in our favour?
Sure. Sir, second, focus states are growing at 2, 2.5x versus the average for a while now. But at the aggregate level, we are not seeing the impact. It's not moving the needle yet. So what is current contribution where we have reached of this pocket of growth? And how -- at what point will you see that this number will actually start driving the overall growth?
Congratulations on good set of numbers. First question is, is the strong momentum that we are witnessing, is it a broader consumption recovery or largely led by our ow n execution or mix of execution in this effect? And how do you see this sustaining over coming quarters? Sunil D’Souza: So, let me say we have always said we will drive double digit topline and bottomline ahead of the topline. And I think we have roughly delivered that. I wouldn't comment about the broader consumption and recovery, etc. I do think the teams have executed our plans quite well and the plans have changed through the year. For example, we didn't have the Salt targeted actions baked in into the numbers or the expansion of certain brands like Sampan n baked into the numbers. But let me say , Tata Cons umer, I would say, is an entrepreneurial company. As we see opportunities, we jump in. It is not that it is not in our budget, so we will execute next year. That doesn't happen here. So, if we see opportunity, we will drive it. We have seen opportunity this quarter and across the board, I think the teams have driven the numbers quite well.
Very clear. Sir, second, the growth portfolio has done phenomenally well. And we have reached our target of 30% of the India business, at least a quarter ahead of your timeline. So, how should we think about this number now moving? Would you say that this can be 40%-50% of portfolio by FY let us say 28-29 or you are keeping it open as of now? Sunil D’Souza: So, let me say growth businesses have to contribute to a higher percentage of the India business fundamentally, because they defined as growth businesses, they will grow faster than the core. So, the mix will change. And that is a conscious strategy. As we seek to diversify away from being a Salt and Tea company into a multi -category food and beverage company, this will happen. We are in the middle of putting numbers together for the next year and beyond. And as and when we have clarity, we will definitely give guidance. But as of now, I would say 30% is a good number to put a peg on. As and when we look at a different number, we will revert on that.
Sunil, just wanted -- just expanding on the Capital Foods and Organic India problem, if I have to call it that. So in most of such acquisitions, one of the key argument is usuall y distribution synergy, given they are usually under -indexed versus our widespread distrib ution. So I was just wondering, I can understand some of the minor issues here and there. But does the distribution also face a challenge and is not as numeric as we think that it will be easier to just plug and play immediately? Sunil D’Souza: No. So Tejash, very simply, I think distribution was a slam dunk. There was absolutely no issue. We've got the distribution expansion in the last 1 year that we expected. In fac t, we probably exceeded a bit. I think the bigger issue is solving for these smaller hiccups, if I may. Just as a perspective, Organic India as well, my secondary sales were 32%. Capital, my secondary sales were 22%. From that perspective, from a consumer offtake, secondary there is no issue. It is just minor pieces that we've got to stick together. And Organic India, just as a perspective, the other pieces, I think I said it in a few the things. The term I would use is, we figured out what the Germans felt when they reached Stalingrad and figured the supply chain was missing, right? Becaus e the theory was that we'll be able to fire up Amazon, which is about 40% of the category in the U.S., we did a few pilots last July, and from September, October fire d it up sincerely. In fact, for the last 3 months, they've been firing at about 51% growth. The catch is the lead times from there, I mean, coming back to Rath, going to the Barabanki factory, packing it, sending it up there, that is s omething, which I think was a bit of a learning for us on Organic India. So yes, most of t hese, like I said, issues behind us. I don't see any reason why we can't deliver the 30% growth that we've talked about Q2 onwards.
Reassuring. Second an d last, you have always stressed aspiration for EBITDA growth higher than revenue growth and for the commodity cycle that we are in, we have not been able to do it. So 16% EBITDA margin that we are potentially indicating by Q2, Q3 this year, where do we stand on that guidance now? Sunil D’Souza: So I do think by Q3, we should definitely be able to get to it. Q2 would be a bridge between where we are to that. We'll be closer to that number than the Q1 number. That's because, as we had mentioned, by the time tea comes into my supply chain, it's roughly about anywhere from 30 to 45 days. So while the auction prices have started dipping about, I would say, about 3, 4 weeks back, now middle of Q2 is when that low -priced inventory starts coming in, and therefore, changing the EBITDA margins. So yes, so we should be in a good place definitely by Q3, bu t we'll be on our way by Q2.
Hi. Thanks for the opportunity and congrats on a very good set of numbers. GK, just you briefly mentioned on consumer sentiment, and then very much kind of our SSG seems to be doing far better than what the broader consumer sentiment seems to be. So, just two dimensions there. Has the footfall improved for us, or the conversion ra te has improved dramatically? A. And B, do you think we are gaining disproportionate market share in our level market, or is it not trackable on a live basis?
Perfect. And we were running some pilots in Gujarat and Maharashtra last time when we spoke, so any update on the same where are we on that?
Hi, GK. Congrats on a good set of numbers. The first question pertains to, when we look at retail from slightly broader lens, there is very heightened activity right from quick commerce players to modern trade, obviously, the competitive intensity was always there. And we are picking from some players that some factors of production like real estate and labor are actually getting costlier, especially at the mass end. So. just wanted to pick your brain on how you are seeing some of those factors evolving for us?
And on labor?
Sir, couple of questions. So, given the recent policy push to revive demand, especially at the urban side, are you seeing any early signs of improvement there? Because you called out that rural still continues to do well for you. So just wanted to know your read on the ground?
And sir, your observation or your data, internal data are suggesting that rural continues to do well. Is it also to do with your extra focus on Pidilite Ki Duniya (PKD), and then rural distribution outreach that you have been doing for a while now?
Hi. Good afternoon and thanks for the opportunity. Neville, first of all, thanks for a truly fruitful and engaging association over the years. It's been really, really enriching for us as well. So, you have been today candid about, and then you have been in the past als o candid about your dissatisfaction with the pace of store expansion. Now, given that external constraints like format, availability, and execution challenges remain the same, I'm just wondering what levers you can actually pull to accelerate from here on ? Or was it always just a matter of focus, but you are now saying there'll be more increased focus from your side to accelerate the same?
And last call, you had highlighted UP and Odisha as well. So, usually we have not seen we adding two states in the same year. So, is it like Odisha will be first to populate or UP or you have bandwidth to populate two states at the same time?
Hi, thanks for the opportunity and congrats on sustaining strong LFL. Sameer, just wanted to know while margins are gradually recovering, I'm curious how the management internally defines the new normal of peak margin. Do you still consider historical peak that we had because that time we had delivery charges and other structure also? Or you believe that we need to kind of, should not anchor our thoughts around that number?
Sure. Very clear. Second question, the past three weeks has seen heightened geopolitical volatility. In that context, how are you evaluating the potential risk, if any, to our investments in Turkey?
First question is on Lifestyle Brands. So very strong like -to-like performance, especially in the tight demand environment that we picked up from other retailers. So I wanted to know what worked for us. And interestingly, in margin expansion in the presentation, we credited channel mix tighter control, cost control and inventory management as key drivers for margin expansion, which are independent of LTL. So how should we think about margins also when, let's say, if we continue this LTL performance, how should we think about margin in coming periods? So those 2 questions on Lifestyle Brands.
And looking at where we are in this calendar year or where we have started, do you think that this performance will continue for this calendar year as well?
My question pertains on paints. You called out that unlike peers, you are not seeing macro slowdown. Just wanted to know, would you still say that versus where we started the year, the macros are slightly difficult where we would have thought it will play out? And second, if there's any truth to that, would you consider going moderate on your capacity expansion? Or will it be as you had planned earlier?
Yes. Second question, are you seeing any higher interest from institutional buyers, real estate developers? Any insight or any update on that?
My question refers to your comment that the commitment was also one of the triggers. I am sure it was not the sole intention to expand or go aggressive on Pizza Hut store expansion this quarter. So, given the subdued demand environment which you called out and the Chairman also called out in his opening remarks, I just wanted to understand how much flexibility do we enjoy on the expansion commitment? Was there an option to delay it considering that demand is still not in great shape?
Manish, given the team's experience with power cycles, we have seen first time in the listed phase, so, just wanted to understand, does aggressive expansion typically pursue during downturns? Does it benefit us in full recovery cycle? Or do you want to wait for demand turnaround before acceleration on store expansion? Just wanted to understand from past experience what has been more remunerative among these two strategies.