session. We will take the first video question from Abneesh. Kindly accept the prompt on your screen, introduce yourself, unmute your audio/video, and proceed with your question.

Thank you. Good morning. My two questions. First question is on the sensitive segment. So we have seen another company, another brand being the leader for many years, and you said that you have become the market leader here. So if you could tell us, was there some promotion-led intensity which has helped? So is this sustainable? Second, the other leader was very strong in the chemist channel, and they had a very strong relationship with the doctors and the decision makers. So because you are ramped up on the oral campaign in terms of dentists, has that helped? And last sub-question to this first question is, because you have launched so many products and the competitor in sensitive does not have so many products is that helping you in some way that you are able to capture the overall mindshare in terms of being a more effective toothpaste? That is the first question.

Do you want to tell me your second question as well, Abneesh, or do you want to --?

Yes, second question, I think everyone will be having that at the top of the mind. Competitive intensity in toothpaste is very high, you have taken the MRP price hikes, but still at the net pricing that is almost going away. And we have seen other company's also comment in Q4 call that promotional intensity is very high. With promotional intensity being so high, the only winner is the customer, while all our companies are losing out in terms of volumes, pricing, and even margins. Who will blink first and when does it happen? You being the market leader have had that kind of a burden on the shoulders, so when do you see the promotional intensity coming back to normal levels?

Okay. Maybe I will take the first one and I will let Jacob handle the second one. So on the first one, I think my comment was really in the space of, given that the oral health of this country is a little bit challenged, there is opportunity for us to build a therapeutic segment, actually. So it was more than sensitivity, it was more about all the various oral care problems that people could have and the solutions that are being built for them. Our focus in this area is actually to drive gum health. And it goes back to the fact that of the people who have oral health issues, 46% of them are actually led by gum health issues. And our effort here will be to have a full portfolio that is across toothpaste, mouthwash, toothbrush, and any other adjuncts that may be relevant at a slightly future point in time that will allow us to have a full portfolio to address this concern. From a partnership with the profession perspective, we have been in this country for 87 years. They have been staunchly our partners for 87 years. I sincerely hope that it will continue for the next 87 years. I think initiatives like the oral health movement only go further in cementing that partnership. We are exceptionally grateful to them for giving their time so unstintingly across 50,000-plus dentists to do these oral health checkups. We also have a very strong partnership with the IDA, that has been a longstanding partnership. And they continue to partner with us as far as this whole oral health movement and our company is concerned. And we have a very strong professional oral health team that actually goes out into the market every day to ensure that we once again keep building on this relationship. So my confidence in our ability to maintain, sustain, and build this partnership actually is exceptionally high regardless of what other brands and other companies are doing in market.

Yes, a very quick follow-up on what Prabha said. So in terms of the oral health campaign, this is something which Colgate has been doing for many years, this time we saw a much more aggressive avatar of that. Given the numbers are muted, how do we measure that it has worked? Because you have done this earlier many years, but this time the Dentist Connect and QR code, all those were there. As an analyst, how do we judge it has worked?

So, I think you need to take a look at what is the intent of the company, because we could be here for the immediate short-term gain of some of these actions and perhaps we would drive them differently. I think the difference for us is that when we say our mission is to improve the oral health of the country, we genuinely mean it. And that is for us a much longer-term, much more consistent, and much more committed effort than the in-between a quarter here or there kind of activity. So the way I judge success of this activity, and I then leave it to you how you judge the success of the activity, is for us to see what's the level of traction that we are getting from consumers in terms of are they interested in knowing about their oral health? What are the follow-up questions that we are getting? What's the engagement that we are getting? And we have been actually very positively surprised by the interest. I mean, 4.5 million is the number. Behind that 4.5 million is an awful lot of interest that sits under it. And then the second judge is, for me, are they willing to take action to help themselves to get to better oral health? And again, we are seeing green shoots there. Do I expect that the oral health movement will move quarterly numbers in the short run? The answer is no. But equally, is it the right thing for us to do to deliver our mission? 100% yes.

Thanks. We can move to the second question in terms of promotional intensity. M.S. Jacob: Yes. So we did increase our promotional spending during the last FY. We do have specific objectives when we increase our promotional spending, it could be tied to driving distribution, it could be sales gain, and that's net incremental net of cannibalization. So, we do track all this closely. We believe, temporarily, there could be a bit of up and down. But in the longer run, this would be about the brand. The consumer needs to come to a store, ask for your specific brands. And it's for us to make sure we are offering the innovation they are looking for, our communication is superior, our product is superior. So as you heard in the last little while, we are investing behind all this and driving that brand superiority messaging through the system. And as this builds up, the trade piece is going to be a temporary piece, we would think. And it will finally default to people, their preference for the brand, because they really like it at the right price point, it offers the efficacy they are looking for.

Thank you. We will take the next audio question from Amit from UBS. Please go ahead. Amit Sachdeva: Yes. Hi. Thank you so much for taking my question. Prabha, I just wanted to ask on the competition bit. Clearly, the premium side has done very well. The Colgate relaunch is growing 4x of the category growth. And sensitivity and other things have also done exceptionally well, which means that the mass end is the problem. And when you allude to competition, can I sort of infer from it that the mass end or Colgate Strong Teeth variant is where you see significant decline, actually, in the portfolio? And that's where the competition concern is coming from, and if this understanding is correct? Because I see other numbers of other companies are not impressive at all. And so when the competition is rising and impacting you, how do we sort of read this? To which segment? And when we see outlook of it, how do you sort of see it in the coming quarters as well? That's one bit.

I think you are absolutely right. And maybe I can break up the India market for you into the three parts that we are seeing and how the three parts are behaving quite differently. So first, there is of course the urban and rural. And I think most companies, us included, over the last little while have called out the fact that there is buoyancy in rural, it continues to do well, it continues to outpace urban. And if you recall, I think a year, year-and-a-half ago this was not the case. And so this is a change that has happened over the last little while, where rural continues to be resilient, we see volume and value growth in rural, and it is driven by our core brands, because those are really the large brands that play in rural India. We are also lucky to have an over-indexed competitive position in rural India versus urban India. So there is an opportunity there for us and an opportunity that we are leveraging. Second, if I come to urban India, at an aggregate level, urban India is slowing. And you saw the data on the slides in terms of market growth and the trajectory of market growth, which has been on the decline. But if I break up urban India into two parts, which is maybe the top 30% and the bottom 70%, the top 30% continues to be exceptionally resilient as far as FMCG is concerned. And I think as far as Colgate is concerned, the portfolio of premium products that we have, whether it is Colgate Total, whether it is Visible White, whether it is Visible White Purple, or the newly launched Max Fresh Sensorial or the therapeutic range, all of these have tremendous traction with this audience. And as a result of which, I talked about the growth of Colgate Total, where actually our entire premium portfolio grows very rapidly. And therefore, the traction that we are seeing with this top 30% is very heartening, very good for us from the medium-term. And of course, very good for consumers who are choosing the right science-backed products to help them with their oral health. Where the problem actually sits in the last little while, and it's not a phenomenon that is unique to this quarter, has been the bottom 70% of urban India. We are seeing that they are under pressure. And that pressure is leading to an impact on oral health volumes as much as it is leading to impact on various other category FMCG volumes. So, between these three, that's where our growth sits. Two of them continue to do very well. One of them has had a bit of a wobble in the last little while. But again, if you see structurally, and you see all of the macro indicators and the interventions that are coming in, I think this is something that is quite temporary. And so to your question of what is our perspective of the outlook going forward, I think the outlook going forward is that this 70% of urban will also pick up. The 30% of urban anyway is resilient. Rural continues to look like a real bright spot. So we see this getting sequentially better, and particularly towards the back half of this year.

Sure. That's very helpful, Prabha, for breaking this up. I just wanted to ask about the competition bit. I think what you alluded to is largely macro on the urban mass, which continues to be very weak. How do we sort of relate it back to the competition comment that you made, that competition has also impacted performance this quarter? When you call it out specifically. And I am sort of curious at which part of the segment, and is the competition receding, intensifying? And how do we make sense of it? And relating back to what should be the outlook for, say, next two quarters? You said the first half could be still weak and the second half could be better. It would be great to have some guidance around how, and especially related back to margins as well. Margin this quarter was very high, should we expect this margin to continue? And/or just kindly help us understand how investors should actually look at these two dynamics playing out.

I think, firstly, if I take a look at our comment on competitive intensity, it links to the comments that Jacob was making in terms of how much money competition is spending, largely driven by trade. And that's what we mean by competitive intensity and our need to be competitive. And that is actually slightly newer than the stuff earlier. But otherwise, when you think about it, has competitive intensity always been high? Yes, in terms of advertising, in terms of the work that they do, that continues. We are not seeing a big change in that kind of competitive intensity. What we are seeing or what we did see to which we have responded, which is why the comment, is the competitive intensity in trade. I think two things will happen. One, everybody will titrate to a level that makes sense for their business and allows them to optimize obviously between being competitive and their top-line growth. And the second is, some of this will anniversarize very soon. And therefore, the impact on the P&L diminishes over a period of time. So between these two, I am less worried about it. It was called out because it is an aberration from the baseline progress. I am going to make one very quick high level comment on margins and then I am going to hand it over to Jacob to give you maybe a little bit more detail. We continue to be a very high margin, high EBITDA company. We have always suggested that our range of EBITDA would be in the low 30s, and that's really where we think we will operate, plus/minus a little bit here or there depending on the quarter. We think the intrinsic strength of the brand allows us to operate there and allows us to make sure that we are doing this while we support the brand at optimum levels. And so that's really our construct. We have outstanding funding the growth program, which looks at every non-value adding cost that we have. And on average, in any given year we get about 5% of our net sales being taken out of the system as non-value adding, which is really helpful and which is what actually helps us to keep the margins at the level that we are at. In fact, Jacob will speak about this. Our price growth over the last little while has actually been quite muted. It's not pricing that's driving this margin, it's actually efficiency that's driving this margin.

Yes. To add to that, we will continue to invest behind our products. As you heard earlier, we have enhanced the quality and efficacy of our products. We just relaunched our Strong Teeth, which is a flagship sub-brand. And we have upgraded the other products over the last couple of years. And we will continue to look for opportunities to take it to the next level. So, those are all going to be cost-accretive, but we will look to cover it through the efficiencies that Prabha mentioned. And at the same time, there would be some level of pricing that will be coming through. But net of it, we expect to be in the range of what you are seeing over the last year or so.

Great. Thank you so much, Jacob. But just one last bit on, since you mentioned that comparative spends and the trade, is it specific to a particular channel, like quick commerce or something? Or is it pervasive across DT as well? And given that, I was just hearing a news flow, I do not know how relevant or how significant that is, but there was some sort of random news flow on Maharashtra Distributor Union, kind of making some noise about price discrimination in the various channels and they are unhappy about it. And is there some resolution to it or is it just a sort of random news flow that comes in and there's no truth to it? So if you can comment on that situation as well. Maybe I am just relating back two and two together, maybe they are not, but if you can just sort of clarify that bit?

To the first question on where the trade investment is going, actually the trade investment is going more in general trade. General trade continues to be about three quarters of this market; and without general trade, there is actually no business. So if you see any number move at a company level, it will be driven by general trade as it is for us. Just because you mentioned e-commerce and quick commerce and all of this, I think we need to keep in perspective that while the channel grows, it is still a very small percentage of our business. E-commerce is about 5% to 6% of our business. We continue to look to drive a portfolio in e-commerce that is new, different, and premium. Max Fresh Sensorials being the comment. And to your specific question on the distributors, we are really fortunate as Colgate, we have a 2,000 strong distributor network, many of whom have been with us for many, many years. And actually similar to the relationship with dentists, we pride ourselves on the quality of the relationship that we have with these distributors across the country. And there is always dialogue in terms of how we can ensure that we grow their business as much as we grow our business. And it's an utterly symbiotic relationship, and that continues to be the case.

Thank you. We will take the next text question from Arnab Mitra from Goldman Sachs. And the question is, what is the outlook for gross and EBITDA margins for FY '26? Do you benefit from lower input cost? Or will the high competitive intensity lead to some headwinds? As a company, do you want to further enhance EBITDA margins from the current 32% to 33% plus levels?

Yes. Arnab, I think we did touch on this question in the last little while. So as we mentioned, our priority would be doing the right things to deliver top-line growth, both as a category level and also for us as a company. We will do all the right things required, making sure we are competitive in trade, our products are superior, our communication is superior and it's at the right level. So all those things are going to be critical. So we are not targeting any particular level of gross margin or EBITDA increase. It will be a result of doing all right things. And our objective would be to drive that top-line, both volume and value, and what is required to deliver that. So, I wouldn't give guidance on any particular level at this point.

Thank you. The next question is from Jai Doshi from Kotak. And the questions are, we have witnessed significant discounts on MT or e-commerce platforms, how are you managing channel conflicts between GT and emerging channels? And the second one is, what was the contribution of premiumization mix to value growth in FY 2025? And what could be the contribution of premiumization of your revenue CAGR over the next two years to three years?

So on the first one, on MT and e-comm pricing, actually there are two or three things that we are looking to do or we continuously do. Firstly, to ensure that there is a degree of parity pricing across all of the channels, because it's important for us that all of the channels grow, and wherever the consumer goes she gets the right price for the right product. The second thing I think is that there is a significant opportunity for us in modern trade and e-commerce to move consumers to the more premium products and the more premium part of our portfolio, and we have started making a significant difference over there. Over half our portfolio now in e-commerce is the entire premium range, as opposed to our core business, which is the bulk of our general trade business. So the combination of these two things, which is the right portfolio in the right channel, and then of course the right pricing across the channels, is how we intend to manage this, because genuinely there is an opportunity for every single channel to drive growth. And only when every single channel drives growth, we as a company get the maximum benefit of driving overall growth. I think to the second question, we tend not to comment on the share of premiumization, but more what we expect that premium would grow at. You would recall that in previous conversations I have talked about how premium should be at least 2x faster than the rest of our portfolio. That was at a time where market growth was looking really positive and quite high. Now that the market growth is slowing, actually we continue to hold our premium growths and therefore the target is for it to be 4x, which is really what we are currently delivering, and we expect that we will only accelerate this more and more as we go through the year. Jacob, you want to build on this?

Thank you. The next text question is from Priyank Chheda from Vallum Capital. And the question is, pricing mix growth for FY '25 was missing despite premiumization focus for the full year. What is the mix improvement on total price growth expected ahead?

So on price growth, as we mentioned, we have been investing in trade for the last year or so, so that has impacted the pricing growth. Going forward, as I mentioned, we will continue to invest behind brand superiority, superior communication. And we do expect it will continue to be quite intense out there, but we expect it will kind of stabilize a bit. We cannot call out a number, but we do expect going forward pricing will be a component of the sales growth.

There are multiple questions around this area, the question is to understand volume growth for recent quarter?

In terms of volume growth, as we mentioned, our pricing did not contribute to it. So we actually had slightly negative pricing, so volume was flat in the last quarter.

Thank you. We will take the next audio question which will be the last question for today from Disha Seth from Anvil. Please go ahead.

Good morning, sir. Sir, we wanted to check that in the press release you mentioned that there is lower urban demand, does that mean that the customers have down-traded themselves like from a Colgate Total to a normal Colgate? Has that impacted our sales? And yes, we can go ahead with that question and then I will add the second question.

I think we are not actually seeing down-trading in the market. And the reason for the slowing volume growth, our understanding is, actually consumers titrate the amount of toothpaste that they use. So it's neither that consumers drop out of the category. So the overall penetration of the toothpaste category remains at its near universal level, it does not wobble. Consumers do not stop buying toothpaste. Consumers do not stop using toothpaste. And maybe I can remind you of some of the stats that we have in this country, which is that 80% of urban India brushes their teeth only once a day and 50% of rural India brushes daily. And therefore, the way to adjust how much you spend on this category is actually by adjusting how much toothpaste you put on your tube. And therefore, the titration downwards of that usage is what leads to a decline in volume. It's not consumers either stepping down brands or in terms of stepping out of the category. Neither of those are we seeing. And certainly, stepping out of the category usually does not happen either.

So you are saying that, so what I understand is, you are saying that people are using less paste on the brush rather than anything else, correct?

Yes, they just titrate their usage in a given period of time and make a given SKU last a little bit longer.

Longer, okay. And second, in terms of competition, when you said the other competitors are giving more trade or more dealer margin and everything, but we have a higher mind recall. So why would a customer go to any other brand than a Colgate when we have a higher mind recall? The dealer pushing shouldn't affect the brand sales, when we are investing so much on a brand. Or correct me if my understanding is wrong, please?

So, I think nothing is ever about the black and white, right? Colgate is by far the single strongest brand in the oral health category, for sure. However, when consumers go to buy products, not all 100% of them are asking for the brand by name. So to give you an example, when a Rs. 10 consumer or a consumer who wants to buy a Rs. 10 SKU goes to a store and asks, 85% of the time they will tell you the brand that they want to buy. So give me a Colgate Strong Teeth, Rs. 10. So they know the brand, the Colgate Strong Teeth Rs.10 then gets handed over. In the remaining 15% of the time, the consumer says, give me a Rs. 10 toothpaste. And therefore, for you to be the most attractive Rs. 10 toothpaste at that moment is actually quite important. And attractiveness is a combination of both your rate as well as the velocity of your product. And that's the combination that gets managed to make sure that we hold the kind of levels of distribution that we are lucky to enjoy given the strength of our brand. So it's a little bit a combination of having a strong brand and driving the branded purchase, which we do a really good job of. And making sure that in the minority cases where the brand is not mentioned, that it is as advantageous for trade to give your brand as any other.

Thank you. Ladies and gentlemen, we will now conclude the question-and-answer session. I now hand the conference back to Ms. Prabha Narasimha for closing comments. Thank you, and over to you, ma'am.

Thank you all for joining us this morning. We look forward to seeing you six months from now. Thank you again for your time.

Thank you, members of the management. We now conclude today's Colgate-Palmolive analysts conference meeting. And we thank you all for your participation. Thank you.