Ladies and gentlemen. We will now begin the question-and-answer session. We'll take our first question from the line of Abneesh Roy from Nuvama. Please go ahead.

My first question is on personal care. So, slide #19 mentions Protex and Sanex. So, is that an indication that these two brands have been kind of shortlisted and if any timeframe? And second related question on personal care is on Palmolive. So, we have seen the three new variants being launched, we have seen mass media also. So, my specific questions are there. Are you focusing essentially on modern trade and e-commerce for Palmolive because you have mentioned that 1.2X growth in share of mind is there in modern trade. So, is modern trade and e-commerce going to be the focus in the next two years here? Second is the category seeing huge disruption. It's a very low penetration, 3% penetration, but we are also seeing one player come with powder to liquid and they have done generally quite well in powder to liquid. So, given that disruption, focusing on premium, does it make sense? And last is your domestic sales growth was around 9.5% as a Company in FY'24. Would Palmolive have grown at least 2x, 3X of that in FY'24?

So, good morning, Abneesh. It's nice to hear from you again. And I'm going to take maybe the first two questions and leave the third one to Jacob. On the Palmolive brand, our focus is not only modern trade actually and I didn't touch upon this milestones algorithm that we have which tells us what kind of assortment, in what kind of stores in general trade and that is something that we will use to make sure that Palmolive is available in the right type of stores in general trade. With the 3% category penetration, we do need to be careful as to where we place the product and so our intention will be to be modern trade, e -commerce, and judicious general trade. The reason for putting the market shares in e -commerce and modern trade is obviously because they respond faster to any action and this is an action that is only about six - odd weeks old, and we're already seeing some green shoot. And we're committed to building Palmolive across all the relevant channels in the relevant stores over the next foreseeable future and we think we have tremendous opportunity over there. The second part of your question on disruption in body wash. I think the lovely thing about having a category which is sub-3% penetration is that there is enough opportunity for everybody to grow in different spaces. So, there is an opportunity of cost at the bottom of the pyramid by offering value and there is equal if not larger opportunity at the top of the pyramid, which is convincing consumers who have money dealing with Palmolive is indeed a superior experience to what they currently experience. So, I think there's enough room and enough opportunity for everybody to grow and so less worried about what other people are doing in this segment in terms of disruption. We're also very, very confident about the technology that we have on Palmolive, and therefore the ability to deliver an end experience which is truly superior. On the first question on Protex and Sanex, I should have put on the image there, "For presentation only". We have a short form in Colgate which is called FPO and that is exactly what that is. It's not an indication of us doing Protex and/or Sanex, but I can only say that watch this space and then we will have some news in terms of what we believe is the right thing for us to borrow from our global portfolio and into India. And to the question on growth, I'm going to leave it to Jacob.

So, on growth, personal care is growing at a faster clip than oral care, and we continue to expect the growth to further accelerate and widen the growth difference as we go into the following quarters.

Just one small follow up on the Palmolive mass media advertising. Would you have a benchmark in terms of what kind of share of voice, etc., you would like to target because this is an under-invested brand for almost 2 -3 decades. So, upfront advertising will be needed. So, in the channels where you are focusing initially, will you have a significant kind of a number in terms of share of voice?

So, I think the way we measure these kind of campaigns is really what is the reach that we wish to deliver and what is the best way to deliver that reach. So, what you see as the mass media advertising is the only the tip of the iceberg in terms of what we are spending on Palmolive. A lot of it is actually going behind influencer marketing, digital campaigns and in store, which is really the bulk of our spends on Palmolive. So, what you see on mass media and multiply it by a few, that is the expenditure on Palmolive, and like I said, we are fully and utterly committed to driving Palmolive and the joy of having a P&L shape like the kind that we do is that we have the wherewithal to be able to do this.

We'll take our next question from Amit Sachdeva.

The question obviously an analyst asks is, how to look into the future? You know it has been a great year. So, with that, I just want to ask a couple of questions there. I assumed that last year was a lot of pricing and obviously initiative of premiumization, but also simultaneously developing the market. Could you help us understand nearly double -digit full year growth, what has been the volume mix and pricing element? And as we go into the next year, right, how do you see these elements shaping up?

So, I think I want to maybe break up your question into two parts in terms of do we see potential for this category to grow and for us to grow within this category and what will make that happen because that's really your question saying, how are we going to sustain this kind of 9.5% growth. And I think the answer to that actually lies in the fact that if you expand the category, the greatest gains will come to the category leader and that is really why 1A of our strategy is to focus on expanding the category, and that's one of the reasons why we are very, very optimistic that we can grow this category. And as we grow this category, we will be able to grow our volumes as well and our value as well. And of course, we haven't even begun to scratch the surface in terms of what we do on premiumization. I didn't talk about it because I've said it before, but just to remind you of some of the numbers, only 12% of this category sits above the 140 index, that number for other personal care categories is already 30% -plus, and even amongst SCCA, the penetration of a premium toothpaste and I'm calling anything above 140 index a premium toothpaste is only at 28%. So, even amongst those who have money, only one in four buy a premium toothpaste. So, the opportunity to then convince them of the superior offerings that exist in our portfolio is exceedingly high. So, very optimistic about our ability to grow this category and therefore continue to grow our volumes and our value. To the second part of your question of, “Do we want to break it up?” We tend not to break up the number just in terms of what we're looking at though is a balanced growth between price and volume as we go forward. So, price, volume, and mix, these are the three things that obviously go into it, and we'd look at roughly a balanced growth between all of them. And to the underlying question of, “Do we have the ability to take more pricing?” Actually, price is always an outcome of what is the value that you're delivering or what is the benefit that the consumer sees, and therefore, what is she willing to pay? And as long as we keep enhancing the benefit that we're delivering to consumers, I think this brand has potential to take pricing. I think actually all of the vectors, our ability to take pricing, ability to expand the market and ability to drive premiumization, I'm quite confident about all three of them.

Obviously without any guidance I can sort of see that where you are alluding to will make our own sense of it. Just to follow up a bit, you mentioned that there's a large space in premium, but then if you map the price curve of mostly consumer categories, there's a prestige price point and premium. Oral care has not yet the prestige part of it. I'm sure there's a consumer ready for the best-in-class and nothing can be better in the world kind of pricing as well, but no brand has at least in oral care, has attempted that the prestige part of oral care. Do you think about developing that market as well or it's too early for India to sort of get into that zone? So, I was just very curious.

Amit, I must tell you that there is nothing about oral care that we don't think about. And so, I think from a perspective of, is there opportunity and if we were to put some numbers to where prestige which fit. So, in skin care obviously the numbers are extremely high, but if we were to say 400, 500 index even that would be considered as prestige in the toothpaste category. Yes, there is most certainly an opportunity in this country, and there is an opportunity that exists already, and I think that we are in a position to start looking at these kind of opportunities, but the large bulk of premiumization will continue to come from 50% to 100% premium kind of range rather than us stretching it all the way out to 400, 500 because that then becomes a very small audience. So, opportunity exists. I think the larger opportunity exists at the more traditional definition of premiumization.

We'll take our next question from Jay Doshi from Kotak Securities. Please go ahead.

I have a request and a one question. The request is I heard your response earlier, but if you could introduce either volume growth or UVG in your quarterly disclosures, and the reason for this request is first of all, all other FMCG share that metric, even Colgate Global does share that metric. So, I feel that is an important metric for investors and analysts to evaluate the progress in terms of volume growth and the results of the efforts that you are making this year. So, that's a request. And secondly, even if you don't disclose, the problem is that there is a lot of noise in the media and wrong numbers get circulated within the community. So, it creates more confusion. So, that's my request. Now my question is on Colgate Total. I think you mentioned that the brand was much larger earlier and you're hoping that it restores back to the earlier level. So, could you elaborate a little bit on it in terms of what was the size of the brand or what was its salience in overall Colgate sales earlier, what is it right now and some additional color if you can provide?

Thanks, Jay. Firstly, on your request, let me just take it back and we'll come back to you, but at the moment, we tend not to provide that and so I'm going to move on from there so as to not repeat myself. On Colgate Total, this brand has existed in the country for quite a while and about a decade ago it actually used to be a double-digit share player in modern trade, albeit in a smaller modern trade category and therefore had significant salience to premium consumers. And it will be our effort to take it back into that kind of space where at least in the channels of the future and in select general trade stores, it continues to start edging towards that kind of level. So, that would really be where our planning and our thinking is. And why we believe we can do that is for me to just… since you've given me the opportunity to talk about Total to just spend a little bit of time on the technology on Total, which is this combination of Dual Zinc Plus Arginine which actually delivers best -in-class 12-hour antibacterial protection and all of us know that actually bacteria is at the root of all oral health issues. And this particular product of ours has backed by 125 patents, which is more than I think any toothpaste in the world that any Company offers and therefore very confident about the technology that this toothpaste offers, the benefit that it offers to consumers, and why it is the flagship of our premiumization strategy.

Where is Total today in terms of salience at the end of FY'24?

As Prabha mentioned we were double -digit in modern trade when we were big on Total a few years back. But since then, modern trade is low single digit. But eCom has been a big story and eCom is the fastest moving in terms of premiumization for us and their Total is a sizeable player already.

We'll read a text question from Percy Panthaki from IIFL. Can you please break up your sales growth for Q4 into volume, mix and price same for FY'24 full year? Also, given that pricing will anniversarise soon, how should we look at your sales growth over the next few quarters?

Prabha mentioned on the volume piece, we are not splitting volume and pricing and so we won't comment on that as of now. Going forward, you're right, as inflation moderates, pricing will be an important discussion, but we do expect the category growth, consumption growth activities that we have initiated along with positive macros in rural that we're seeing, rural grew faster than urban and we continue to see green shoots there. So, combination of that along with premiumization would be key for us to continue to deliver the current level of growth.

We'll take a video question from Mihir Shah.

Prabha, my first question is on margins actually. Apart from pricing and better mix, you mentioned there is a continuous cost -saving initiative that is improving the margins both on gross and on EBITDA level. How much more juice do you think we have that we can take out from the cost side which can keep taking these margin profiles higher? I'm sure we are quite an efficient Company and I'm sure there is a lot of zero -base budgeting that you guys will do. But for us to understand where the gross margins can really stack at somewhere from 69%, 70% levels maybe in the next few years’ time, where can it really settle down only from the costing side? I understand the premiumization side, but from that side maybe you can help us understand.

So, I think firstly, I don't think it is our effort to massively expand margins as we go forward. Like I said, our focus is really on looking at our cost lines with a view to saying what is non - value adding cost and can we suck that non -value adding cost out of the system. And yes, we are an exceedingly efficient Company. But there is always room for more efficiency. Things evolve, technologies evolve, markets evolve, thinking evolve, lots of India's capability evolves, many, many things move, which allow us every year to have new opportunities to suck out non-value adding cost. So, I think this ability to generate around 4 -5% of net sales as gross saving is something that I think we can continue into the foreseeable future given that things will keep moving. The question of how much of that becomes a margin expansion and how much of that we use to funnel back into driving better quality products, better packaging, I think that's really the key question for us and our effort will be to make sure that we are judiciously using the sources of funds into uses that allow us to drive our top line up. So, if you are looking for a perspective on our margins going to continue to expand at the rate that they have between last year and this year, the answer is most definitely not. I think that is more a one-off expansion that you're seeing. Our effort will be to be in and around the ballpark of where we are currently.

Second question, Prabha. I just want a clarification. You mentioned that 9.5% growth rate is a sustainable growth rate that we should assume on overall basis. Is that a correct understanding?

I don't recall mentioning that. I do recall mentioning that I think there is tremendous growth opportunity in this category and that will be our focus, but I am certainly not giving a guidance on the numbers.

I understand you're not breaking the price and the volume, but maybe you can give some sense on the mix that we are seeing, is there a mix improvement… I'm sure there is a mix improvement that is a part of this. Would it be in low single digit, can that inch up to higher single digits later on, or do you think this mix improvement of low single digits of couple of percentage points will continue here, just a clarification on that also please?

So, I think the way we look at it is to have a growth rate target for our premium portfolio relative to our core portfolio and at this moment, our target would be to be at least 2.5X, 3X faster with our premium portfolio than our base portfolio and at this time we're exceeding that target. And really given the plans that we have line of sight for the rest of this year, we can see that continuing to be the case. So, whether it is Colgate Total or it is Visible White with its innovations and the work that has been done on communications or it is the push into therapeutics that is gaining momentum, we do see an opportunity for this 3X growth rate at least of the rest of the portfolio to continue and that will keep adding to mix and that's really what we're focused on rather than a measure of what percentage of the mix is it.

We'll take a last question from the line of Vishal Punmiya from YES SECURITIES. Please go ahead.

My only question is on rural markets. The first time that we had highlighted green shoots, so was in August last year. Now, this quarter, almost every Company is kind of calling out the improvement in rural markets. The question is, is it just because of base effect or is there any major improvement that you are seeing in consumption for your category? And with this improvement, with rural picking up, do we expect the premiumization -led growth to be slightly slower in FY'25 versus FY'24 while volume growth improves for you?

So, thank you. That's a great question, Vishal, for us to end this session with. So, what we are seeing in this quarter is rural is outpacing urban growth by close to 200 basis points, which is great news for us, because there is so much opportunity to grow this category. The reasons behind that and we are I guess in the same boat as everybody else as we give this reason saying that there are macroeconomic indicators that rural is coming back, lots of categories are coming back as are we. From a more internal perspective of what we have done, we have doubled down on our execution and communication in rural. So, we have gone deeper and wider with the communication that we have and obviously this supported by the increase in product quality and packaging quality of our flagship brand, which is the largest brand in rural which is Colgate Strong Teeth really does help our rural growth. So, that's kind of what is happening as far as the rural market is concerned and obviously all of the indicators, the macro indicators that we are hearing in terms of what the monsoon will be like, a general feeling of optimism in the rural markets suggests to us that this is something that is sustainable along with the stabilization of inflation that this is a sustainable growth at least for the foreseeable future. On your second piece on, “Will the rural growth preclude the premiumization growth?” I don't think so, because these are actually quite independent, and therefore in the way that we look at it, it is more an "and thought" than an "or thought" that where we had already a premiumization engine as we discussed that was working and driving towards greater growth being driven largely by better off consumers in urban India. The rural growth will now become an "and" on top of it. So, we will see a combination of A+B which should certainly help growth going forward.

I now have the conference back to Ms. Sujata Nairi for closing comments. Over to you.

Thank you, Yashashri. Thank you, Prabha and Jacob for your thoughts and insights and thank you everyone for joining us. We are very excited for the year coming by and looking forward to hosting all of you again. Thank you once again on behalf of the entire Colgate team and let's close the analyst call now.

We now conclude today's Colgate -Palmolive Analyst Conference Meet and we thank you all for your participation.

This transcript has been edited to remove any grammatical inaccuracies or inconsistencies of English language that might have occurred inadvertently while speaking