Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question on webcast may click on the ask a video question, which will be enabled below the media player. Alternatively, you may also post your questions on the ask a question tab available on your screen. Participants connected via telephone may enter a star and one on their phone to ask their questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama Wealth. Please go ahead.

Yes, thanks and congrats on good recovery. I have two questions. My first question is when the analyst meet had happened, say around six quarters back, you were doing a big pilot project of connecting with the dentist where the QR code was put wherein customers could connect to the local dentist. If you could update us how that has helped with the premiumization in terms of growth, etc., because all this happens with some level of lag. And related question is on the B2B sales to the dentist in terms of the specialized product. If there is some update you can share in the last few years, how is the movement? That is the first question.

Firstly, hi. It's nice to hear from you again. Talking about the oral health movement project, which you are referencing, which we did about six quarters ago, that project actually was a tremendous success. We spent significant money behind it and got four and a half million people in India to take the scan. Our estimate is about 20% of those consumers actually went to the dentist. Almost a million people went to the dentist. When you think about the fact that only 9% of India goes to the dentist, this is actually quite a significant number in terms of the movement. A real win-win partnership between us and the dentist and the consumer because the consumer gets better oral health, the dentist gets more patients, and for us better oral health is absolutely a win. And this is why we are doing that project again this time, the oral health movement. The dentists come in a slightly different format because one of the pieces of feedback that we got from consumers was that not everybody lives within their ability to travel to a dentist in their vicinity. And therefore, we have used technology to make the dentist visit virtual. So, now the 500 million packs that I talked about that carry the QR code allow you to scan it and set up an absolutely free dentist appointment. And again, we are grateful to the 50-odd thousand dentists and the Indian Dental Association for partnering with us to ensure that they so generously give their time to do these consultations. How does this help us? Firstly, 4.5 million people have entrusted us with high-quality data on what is their oral health, what's the kind of indications that they could potentially have, along with what are their lifestyle habits that impact that oral health, whether it be tea, coffee, consumption, and stains, or it be their having diabetes or not having diabetes, et cetera. So, this data has been invaluable to us in terms of the products that we create in terms of how we use this data to create lookalike audiences that we can then target in terms of solving for the issues or building on the opportunities that they have. And that's exactly why we are repeating the program as we speak. In terms of the sales to the profession, that channel is doing exceptionally well. We grow on average over a two-year CAGR of close to 50-60%. We have feet on the street now of about a shade over 150 people, and we do intend to augment that field force. And again, that channel helps us. Of course, it does B2B sales, but that's just one part of it. It helps us to cement our relationship with the dentist. It enables the two-way dialogue between us and the dentist in terms of what's new and what's innovation and what have we learned in the oral care world while we learn from the dentist what is happening with patients in India and what is the need where we could perhaps plug. So, a really critical channel for us, relatively small, growing very rapidly, really critical, and something that we intend to double down on as we make the entire therapeutics play much bigger.

Thanks. My second question has two subparts. One is your Visible White Toothpaste, really very innovative product, industry-first product clearly. Now we are seeing competitors launch an extremely similar kind of product, which looks almost like a Xerox copy in terms of the product and maybe even the packaging. So, does that expand the market? And how has your product done? Second subset question will be, there have been a few D2C companies, startup companies in the toothpaste and broader oral care space. Any learning from there? Any market share loss which has happened for the legacy players? And is that a long-term threat for you all?

So, thanks. On Visible White Purple, I guess imitation is the best form of flattery, I guess. But what we are seeing is that the segment is expanding quite dramatically, and we continue to be the absolute, like massively lion's share of that segment. And we are not at the moment seeing a slowdown. In fact, we are seeing an acceleration in the rate of growth of Visible White Purple and actually the overall whitening play that we have. From a D2C perspective, most of the D2Cs currently are still small. So, are we seeing any share loss? No. In fact, our digital share continues to actually improve, and our shares in Quick Commerce actually tend to be ahead of our shares in the rest of e-commerce, and overall e-commerce tends to be ahead of our overall business. So, we tend to get better and better as that chain evolves.

Thank you. The next question is from the line of Mihir Shah from Nomura Wealth. Please go ahead.

Hi, thank you for taking my question. My first question is on the pricing growth. The press release says that the volume and pricing were balanced for the fourth quarter. Wanted to understand when the price hike was taken? Was it at the beginning, middle, or the end of the quarter? Also, it seems the price hikes related to the inflation seen post the West Asia crisis have yet to be taken. Can you share what is the inflation that you are seeing due to this? That's my first question.

Yes. So, the pricing that you are seeing, so first of all, the growth is balanced between pricing and volume. It's almost halfway. And all the pricing is the pricing we have taken after the Q1 calendar last year. So, this is just anniversary pricing. As you know, post-GST, we haven't taken any pricing. And this is all old pricing. So, in terms of what we are seeing in terms of inflation, we have visibility into the next two quarters. And we believe margins will be in the range. There are some headwinds in terms of commodities and also the currency coming through. But the funding, the growth program is delivering good savings. And we are also getting a favorable mix, et cetera. So, we do expect it would be in the range in the next two quarters. We are actively assessing pricing opportunities. And we do expect, we have actually put some pricing through. And it should be coming to the market over the next few weeks.

Can you highlight the level of pricing that is expected in the next few weeks? And the margin range you mentioned would be around 30-32% over the next two quarters. Would that be a fair understanding?

I need to correct that. The gross margin will continue to be in the range. So, the EBITDA margin will be a factor of the level of advertising. And we have been alluding to that through our presentation that we have been seeing good elasticity to the increase in advertising. And so that piece will continue. So, 12.6% that you saw in Q4 is, Q4 is normally the lowest. So, we would see a step up from those levels. And so that would start eating into EBITDA. But gross margins would stay in the range is what I wanted to communicate. And the second question is pricing. Different categories will see different pricing. Depends on the cost increases we are seeing. But it will be in the low single digit.

Got it, clear. Secondly, on volumes, how should one think about volumes going forward? As the base quarters going forward will have, would have seen volume decline. Unlike 4Q where the base quarter was flat on volumes. So, can one expect optical volume growth to be higher going forward?

Our endeavor is to deliver a balanced growth between volume and pricing. So, similar to what we saw in Q4, that's the kind of volume we are looking at going forward to, and not relying on pricing as much as we have probably done in the past. But also, not relying too much on volume like we have done for a couple of years. So, a balance between the two is what we are seeking to deliver. Got it.

I just wanted to add that as our premium mix gets larger and larger, we also get the benefit of the mix going into this growth.

Got it, Prabha. That's clear. Thank you for that. And lastly, any thoughts around bringing the international brands or subcategories within India, any work around that? If you can just highlight any few things around those. Thanks. That's all from my side.

So, I can tell you that we are doing some work around taking a look at our portfolio and what would be relevant for this market. Nothing that we can share at this moment in this public forum, but work definitely on.

Thank you. The next question is a video question. It is from the line of Percy Panthaki.

Yes. Hi, Prabha and team. Just wanted to understand when you talk about premium, first is how do you define it internally? And secondly, if you can share some data in terms of what was the contribution of premium, let's say, a couple of years ago and what it stands today to your overall sales?

So, we define premium as anything that is over the 130-140 price index to our base and really in brand terms, that is outside of Colgate Active Salt, Max Fresh, Strong Teeth and Cibac, most of our portfolio or almost entirely all of our portfolio sits in premium. The growth of premium has been actually six times the toothpaste category growth. It has accelerated to double the growth that we had last year. And if you remember on Jacob's slide, actually, the contribution has increased by 35% over the two-year period. So, on any measure that you see, premium is actually accelerating. The rate of growth of premium is accelerating. And the amount of money, as we have mentioned, on advertising and support that we are spending on this portfolio is also increasing. And our feet on the street in terms of building a therapeutic business are also increasing. So, this is a critical pillar of our strategy, one that currently is giving very, very good results, and one that we intend to double down on absolutely.

So, sorry, premium is 35% of sales currently? Did I get that right?

35% delta over where we started two years ago.

So, that's a 35% growth in that portfolio. Is that what you mean?

It's a 35% increase in its contribution to our business.

Okay. And roughly, what would be the premium contribution to business currently? Would you be able to share that?

We tend not to give the split up between all of our brands.

Okay, understood. Secondly, I just wanted to understand in terms of the demand environment, how is that panning out and what has driven this sales growth? One way to look at it is, of course, to look at the two-year CAGR growth, because there are base effects. If I look at the two-year CAGR growth, that in Q4 is similar to what we saw in Q3. So, this acceleration that we are seeing, is it just a base effect phenomenon? Or is the acceleration here to stay? And if it is here to stay, is it on account of some changes in the overall consumption environment? Or is there some other reason for that?

If I break up your question into two parts, we are feeling optimistic about the growth that we are seeing in our business. There are two or three key fundamentals that we believe have changed as we take a look at it. The first one is the performance of our core brand. We invested behind product superiority last year on our flagship brand, Strong Teeth. It takes time for consumers to try that product and then to come back to that product as increased retention rates and increased share of requirement, which is what we are seeing now. So, that's on a good, strong trajectory. And we are adding households to Colgate's Strong Teeth, which really augurs well as a lead indicator of future performance. Max Fresh continues to be exceptionally strong, the fastest growing brand in the portfolio, continues to be so, and accelerates because the segment itself also grows quite rapidly. So, that's on the core. And then like we have discussed, and maybe I am laboring the point, but we are excited about it, so let me labor it. Our premium brands are really responding to the inputs that have been given to those premium brands in terms of the amount of money on media and the way that that media has been deployed, which I think has been extremely intelligent in terms of having ideas that come through from the company and which then get amplified by influencers and key opinion leaders. I think the team has done an outstanding job of delivering a campaign on both of these brands. So, these are the two big things that have shifted, giving us optimism that this is not a base effect.

Right. And last quick question on EBITDA margins. For the full year, you have done 31.2% this year. And how do I look at, I know there will be quarterly variations on ad spends and all that, but if I want to look at it on a full year basis, do you think that the current level of margin is healthy enough? Or would you say that there would be some gradual margin expansion on this base as well? And particularly for FY27, keeping in mind the cost inflation, etc., and more generally speaking over a two, three-year period, would you sort of build in a margin expansion or retain at these levels?

As I mentioned, gross margins, we will continue to keep pushing it with funding the growth program and getting more efficiencies out. EBITDA, we are not looking at any particular level or any particular level of expansion. For us, as I mentioned, we are seeing good response to the step up in advertising, and that would be a key variable. So, we will continue to calibrate between top-line growth and volume-driven top-line growth, which would be a huge priority and which will also be supporting premiumization. And the EBITDA. So, we are not looking to specifically drive a percentage EBITDA here. Top-line growth driven by volume and moving the absolute level of profit would be the key priority.

Thank you. The next question is a video question, which is from the line of Harit Kapoor.

Hi, good evening. So, just two questions. One was, if I look at the last couple of quarters, the pricing, the optical pricing growth was probably depressed a little bit due to higher promotional intensity as well. Would we say that this Q4 has seen the kind of real impact of the pricing initiatives that we had taken through this year? And does this also signal that to some extent; promotional intensity has been lower in Q4? And is there any kind of trend or trajectory to make of it? That's my first question.

We are not seeing any let up in promotional intensity. The market continues to be quite competitive. And we have been calibrating in the sense we have used the revenue growth management process and now started employing AI tools to keep culling promotions. But we are redeploying it back. So, honestly, we are not seeing the let up that you are asking about. So, we expect in the short term, it will continue to be at this level.

Got it. And because I was just trying to reconcile between the higher pricing growth in Q4 versus the maybe Q2, Q3 quarters. I think one variable was that maybe promotional intensity may be a bit different. So, that was the source of my question, the second one was on this inverted duty structure bit. So, you mentioned, I think, 80 basis points for the year, if I am not wrong, and 160 basis points for the quarter. Is it fair to assume that one has to absorb this impact into the margins, even going into the FY27? Or do we believe that we can have a pricing offset against the inverted duty structure, which in turn protects the profitability?

So, when the GST change happened, we passed through the entire gross saving, which is about 11%. So, the bulk of our products, GST rates moved from 18% to 5%, we didn't pass it on netting off the IDS. So, that stays in the baseline. We are approaching it in multiple ways. One is there are ways to be more efficient here. And for example, there are transporters who move to 18%, but there are transporters on 5%. So, there are different ways you could find to offset a part of it. And then we are also making representation to the government, to the industry chambers, to requesting that we be allowed to get a refund from all the non-manufacturing states. As you understand today, you are allowed to claim refund in the states where the plants are present and not the other pure warehouse and distribution states. So, that's the other piece we are looking at. And the third piece is some of our key suppliers are also representing to the government to lower the rate, input rate on their material. If they are supplying at 18%, they are saying they are supplying primarily to the oral care industry, which has duties at 5% and they should not be charged 18%. So, multiple ways we are looking at it. We stay optimistic that we will find a more reasonable solution to this.

Thank you. The next question is from the line of Latika Chopra.

Two questions, quick ones. First was during the quarter, did the volume growth see any benefit from grammage increases for your low unit packs? Was that something which was material?

So, maybe I can take that one. As Jacob mentioned, Latika, we have put through some grammage increases as part of the change in GST and passing on benefits to consumers. And actually, we have put through more than 11% on a few of the packs. However, given the pipelines of all of these, this is not the reason for the balanced volume and price growth. That's not the underlying reason. That's taking time to get there. I think even of our latest estimate in March, only about 30-40% of those SKUs, which are already just a small part of our business, are with higher grammage. So, we are not seeing that as the reason for the volume growth, if that's where the question is coming from.

No, not entirely. I just thought, was that a material contributor? But I got the sense that it was immaterial. The second bit was as you look at FY27, and you have talked about a lot of initiatives that we are putting underway, is it fair to assume that there's a fair bit of comfort that earlier we used to target and talk about a mid-single-digit volume growth in the business? And is that something that you think is a fair growth outlook for your business for the next few years?

So, we obviously are looking to grow this company fast. Top-line growth remains a huge priority, and the balance between volume and pricing would be the key one. So, beyond that, Latika won't be able to give an indication of what that number is that we are targeting. But obviously we are looking at high numbers, and we are looking at a balance of volume and pricing that should give you an idea of where we expect to land.

All right. And the last one was on e-commerce and quick commerce channels. Clearly this is a margin-accretive and a market-share-accretive channel for you. I just wanted to understand, in FY26, what were the feelings of this particular channel or as you exited the year? Thank you.

So, Latika, the channel is roughly about 10% of our business now. And like I said, yes, it grows faster, it gains share, it drives premiumization, it drives margin. So, it's a channel that is completely in sync with the second pillar of our strategy, which is to drive premiumization.

Thank you. Thank you very much. Ladies and gentlemen, that was the last question for today. I will now hand it over to Ms. Neethi Nair for her closing remarks.

Thank you, everyone. With this, we come to the end of our Analyst Meet. Many thanks for your participation and your time. The playback of this event will be available on our company website later on. Good evening and have a nice Weekend.

Thank you. Ladies and gentlemen, on behalf of Colgate-Palmolive India Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.