Sundrop Brands Ltd — Q4 FY26

Sundrop Brands Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=7gI9M8Tb0MM Published: 5 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Sundrop Brands Limited Q4 and FY26 earnings conference calls. As a 0:10 10 seconds reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:20 20 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchdown phone. I now hand the 0:28 28 seconds conference over to Mr. Ajay Takur from Anand Rati Securities. Thank you and over to you sir. 0:34 34 seconds Hi everyone. Um thanks for attending the call. Uh from the management side we have with us Mr. Nitish Bajage group 0:42 42 seconds managing director. Mr. Ashish Kumar Sharma CEO and executive director. Mr. 0:48 48 seconds KP and Shin Noas CFO. Uh without you know wasting much of a time I would like to hand over the call to Mr. Nitesh Paj 0:56 56 seconds for his opening comment and followed by the Q&A session. Over to you sir. 1:01 1 minute, 1 second Right. Thank you so much AJ and good morning to all the participants on this good afternoon to all the participants in this call. Uh I will start with the 1:10 1 minute, 10 seconds presentation. I hope you have the slide deck with you for sake of uh because we are on a call. I will keep talking about 1:17 1 minute, 17 seconds the page number on which I am so that you can relate to the slide which I am referring to while making my commentary. 1:25 1 minute, 25 seconds So I'll move straight to slide number three for investors who are joining for the first time in the organiz uh for 1:31 1 minute, 31 seconds this call. Uh it's just a brief recap of our vision. So as an organization, Sunz 1:38 1 minute, 38 seconds is committed to bringing joyful food experiences to the modern evangel consumers and we continue to do so by 1:46 1 minute, 46 seconds ensuring that we launch innovative, delicious and more convenient packaged food solutions for our consumers. 1:54 1 minute, 54 seconds A quick I'm moving on to page number slide number four. A quick recap recap of our investment thesis uh Sandra brand 2:02 2 minutes, 2 seconds as you know with the acquisition of Delonte food which happened in February 205 it has become a larger scale food 2:10 2 minutes, 10 seconds platform and because of the intrinsic nature of the portfolio of categories we are in and the brands we have we do have 2:18 2 minutes, 18 seconds a very significant growth opportunity sitting in in this portfolio. what sets us uh cemented on the path of this uh 2:27 2 minutes, 27 seconds strong performance. One of course the kind of categories we are present in each of these categories reflect a very 2:35 2 minutes, 35 seconds strong growth opportunities are intrinsically high growth uh categories with good opportunity to expand both 2:43 2 minutes, 43 seconds communication and consumption and also they are fairly margin uh strong categories uh where we operate. 2:52 2 minutes, 52 seconds what we do as a management what we bring on table is of course a very strong renewed focus on driving growth of the 2:58 2 minutes, 58 seconds core portfolio of brand. So when we went into this uh new journey for some programs about a year and a half back we 3:07 3 minutes, 7 seconds did take a call to focus on certain core categories and we are staying invested in a bigger way as we move on the 3:14 3 minutes, 14 seconds journey for accelerating growth on these businesses. 3:18 3 minutes, 18 seconds Uh also if you look at our channel play this organization has a very strong uh channel footprint spanning almost the 3:27 3 minutes, 27 seconds entire spectrum of food categories. So from well side we bring in the presence to a very strong B2B network from Sunrop 3:36 3 minutes, 36 seconds side we bring the presence to very strong B2C network. If I talk about the high growth channel which is modern 3:43 3 minutes, 43 seconds trade and e-commerce both companies are very strongly embedded in both channels. 3:49 3 minutes, 49 seconds So very strong uh footprint and very strong claim fast growing channels is what we do have in the portfolio. 3:57 3 minutes, 57 seconds Overall from a direction point of view the focus of management is to drive for profitable growth and hence we are 4:04 4 minutes, 4 seconds consistently working with a very strong capital efficient approach for our investments so that we keep building 4:11 4 minutes, 11 seconds scale and profitability together. What it also means is as we keep building our skill and profitability and ensure we 4:19 4 minutes, 19 seconds create sufficiently strong capital reserves, we will continue to look for opportunities both for economic growth 4:26 4 minutes, 26 seconds driven through investments in the current portfolio and also any inorganic opportunities which would be interesting 4:34 4 minutes, 34 seconds interesting and a strong fit to our portfolio. Moving on to slide number five. Sundra brands as you are aware is 4:42 4 minutes, 42 seconds a combination of three very very strong powerful market leading brands. At the core of it is Sandra which is what the 4:49 4 minutes, 49 seconds company originated with and we have of course two international brands actu and then monte where we own a contextual 4:57 4 minutes, 57 seconds license for these brands in the greater India subcontinent. 5:02 5 minutes, 2 seconds Now coming on to reserves I'm moving on to slide number six. So this is of course uh this quarter has continued on 5:11 5 minutes, 11 seconds a very strong growth trajectory for us as a business we have delivered a revenue growth of 11% in the entire 5:19 5 minutes, 19 seconds grocery business consolidated for some drop and delmon put together specifically talking about our B2B 5:26 5 minutes, 26 seconds business which is unique for Belmont business where we have continued again with a very strong growth of 12%. So 5:33 5 minutes, 33 seconds both B2C and B2B business continue to be on a strong growth trajectory for business. Talking about our emerging 5:42 5 minutes, 42 seconds channel which is our e-commerce business again very strong growth of 26% driven by increased investments going into this 5:51 5 minutes, 51 seconds portfolio. So that also continues to shift very strongly for our business. 5:56 5 minutes, 56 seconds What you will see in the inh presentation ahead that advertisement investment looks to have fallen down but 6:04 6 minutes, 4 seconds from real perspective for a life to light comparison we had a flat quarter on the investment side why it's 6:11 6 minutes, 11 seconds important to uh see in a different context because we really started our aggressive investment journey from quarter 4 of25 6:20 6 minutes, 20 seconds so after the new set of promotions came to the business we had started investing investing very strongly on the portfolio 6:28 6 minutes, 28 seconds from quarter 4 of last year itself. So on a that base the advertisement investment is less but intrinsically if 6:37 6 minutes, 37 seconds I look at from our overall investment strategy we continue to spend close to 5 to 6% of our top line on advertising 6:45 6 minutes, 45 seconds much higher than what we were doing let's say a year to two years back. So the direction of investment continues uh 6:52 6 minutes, 52 seconds on advertising and driving the growth of the business. We have talked about this in the previous uh investor meetings also about the entire efforts which are 7:01 7 minutes, 1 second going on on ensuring efficiencies costs takeout sitting in the consolidated organization. really happy to state that 7:09 7 minutes, 9 seconds this journey has moved even further forward and we had a significant gross margin expansion of close to 4% in this 7:18 7 minutes, 18 seconds quarter versus uh sales quarter last year. 7:22 7 minutes, 22 seconds As an outcome of these uh our AIA has grown very sharply we have had a very significant growth I haven't called out the growth number in this quart of 7:31 7 minutes, 31 seconds presentation because last year was very negligible a bit and hence what I'm really calling out is that our margin has moved to close to 7.3%. 7:40 7 minutes, 40 seconds Just also for the client creation this is a beta margin reflecting net of oneoff spends and also the esop expenses which are non cash expenses in nature. 7:50 7 minutes, 50 seconds So that has moved very strongly and overall our beta for the quarter was close to 28 cr excluding esops and one of expenses. 7:59 7 minutes, 59 seconds Uh moving on to full year. I'm on slide seven. Folar statistics very similar uh performance. 10% growth at the 8:08 8 minutes, 8 seconds consolidated level, 11% growth in our B2B business. E-commerce growth was stronger at 35%. Overall, we invested 8:17 8 minutes, 17 seconds close to 18% expansion in our advertisement expense expenses which is ahead of what we are driving in terms of 8:24 8 minutes, 24 seconds growth. So we continue to drive ahead of our investments for driving accelerated growth overall margin expansion for the 8:32 8 minutes, 32 seconds year uh to get 270 basis points. What is important is that as we have gone through the year we have seen consistent 8:40 8 minutes, 40 seconds margin expansion and hence our also has consistently moved forward. Our overall in the year has grown by close to 96%. 8:49 8 minutes, 49 seconds And at the end of full year our aida again in context of data are one of expenses and that's about 5.7% of 8:57 8 minutes, 57 seconds compliance and this is a significant expansion of a data from what we had a year before. 9:04 9 minutes, 4 seconds Moving on to slide number eight uh overall if you look at sunrop and then we put together uh sunrop accounts for 57% of our revenue accounts for 33%. 9:17 9 minutes, 17 seconds We are seeing very strong growth in both organization and we have also seen growth acceleration specifically in Chandra if you look at our growth has 9:26 9 minutes, 26 seconds move upwards from 5% last year to 12% in 26 and quarter 4 has been even at about 9:35 9 minutes, 35 seconds 14% growth if I do the same context for well pay uh the larger year has been at 9:43 9 minutes, 43 seconds a very stable growth trajectory of 9% % it looks lower than what we had in 13% but it's important to call out uh one 9:52 9 minutes, 52 seconds event which has impacted this number overall. If you look at our olive oil business which is about 16% of our uh 10:00 10 minutes revenue for Delmare as a business that business has seen deflation in the community prices we have passed on those 10:09 10 minutes, 9 seconds price reductions to the consumer because of which the value growth on uh uh well 10:15 10 minutes, 15 seconds month business has been monthly oil business has been limited in volume terms the only world business is growing 10:23 10 minutes, 23 seconds at close to uh 16%. So while in value times the entire Italian business is declining by 5%. So net there is almost 10:32 10 minutes, 32 seconds like a 20% delta impact because of passing the benefit of reduced commodity 10:40 10 minutes, 40 seconds prices to the consumer and on a 16% base that 16% total base for the business it means almost like a 3% diversion in the 10:49 10 minutes, 49 seconds overall growth. So my net result is this business is intrinsically growing closer to 13% even in this year. Having said 10:57 10 minutes, 57 seconds that as we go into the next year where it will be intrinsically volume growth because price adjustments have been done 11:04 11 minutes, 4 seconds all in the previous year we would see strong accelerated growth coming back in value terms in one business also. Moving 11:12 11 minutes, 12 seconds on to slide number nine. uh this is the context of core categories where we invest and this call we have taken right 11:21 11 minutes, 21 seconds from F5 from G5 uh uh for four onwards these are categories we see as strong growth periods so in the context of 11:30 11 minutes, 30 seconds sunro is the entire business of popcorn it is a business of spreads peanut butter spreads and also our business 11:38 11 minutes, 38 seconds where we are emerging as a strong growth you know which is a business of great similarly in context of Belmont this is 11:46 11 minutes, 46 seconds Var business sil and Italian range and these are the portfolios where we are doing increasing 11:54 11 minutes, 54 seconds marketing investments to grow this portfolio as a result of our investment is now increasingly uh taking an 12:02 12 minutes, 2 seconds increasing share of our business and over a period of last three years we have moved the salency of this business 12:09 12 minutes, 9 seconds to 62% plus and there is also of course a quarter on quarter improvement So last quarter this portfolio used to 12:16 12 minutes, 16 seconds be about 61%. In quarter four this has moved to about 62% of our total portfolio. 12:23 12 minutes, 23 seconds Moving on to slide number 10. This is a reflection of how our core categories where we are investing are doing at the 12:31 12 minutes, 31 seconds overall level. If you look at most of our categories where we play, most of the portfolios where we play are 12:38 12 minutes, 38 seconds demonstrating strong volume and value growth in if I look at popcorn as a business growing at 10% in volume and 12:47 12 minutes, 47 seconds 18% in value terms. Our culinary business which is a combination of ketchups and mayo growing at 8% in uh 12:55 12 minutes, 55 seconds volume and 10% in value terms. Premium stickers which is our edible oil business uh has done very smartly this 13:03 13 minutes, 3 seconds quarter we have grown at about 15% in volume one term and 20% in value and I'll talk about what shifts we have made 13:10 13 minutes, 10 seconds in this business but this actually is a good sign because historically this business used to be one which was decline for us so we have changed 13:19 13 minutes, 19 seconds certain investment strategies and uh cut mixes which is helping us accelerate the growth in volume terms in this business 13:28 13 minutes, 28 seconds Italian business I talked about grown in quarter 4 in volume terms by about 17% 13:35 13 minutes, 35 seconds value times it is still a decline of 4% net there is still important point is this business if it continues to 13:43 13 minutes, 43 seconds maintain our growth momentum and revenue next year it would reflect very strong volume and value growth uh which we 13:51 13 minutes, 51 seconds which we as a continue to drive spread business which is our better business continues to be a source of uh 14:00 14 minutes opportunity plus also bother for us because while we have been bringing new initiative and I'll talk about some of 14:07 14 minutes, 7 seconds them we are yet to see recovery in this business even in port but I'll talk about some of the initiatives we are going to turn around this business also 14:16 14 minutes, 16 seconds as I move ahead in the presentation moving on to slide number 11 uh very similar performance across categories at 14:25 14 minutes, 25 seconds the full year level also we are clearly seeing all categories reflecting very similar momentum in London and value 14:33 14 minutes, 33 seconds time the one where we do see some difference of course I talked about premium staple or edible oil business where our volume growth trajectory has 14:42 14 minutes, 42 seconds move moved significantly upward from 50% volume growth at the full year level towards 15% volume growth in quarter 14:51 14 minutes, 51 seconds rest of the business are very similar and at full year level and quarter I'll now give you some context of how we 14:59 14 minutes, 59 seconds are doing in various categories. I'm moving on to slide number 12. Popcorn which is the core of our S2 franchise 15:07 15 minutes, 7 seconds business and also very central to some of brands as a company is shaping up 15:14 15 minutes, 14 seconds very very strongly. We are a number one player in both ready to cook and ready to eat formats and by far we hold close 15:22 15 minutes, 22 seconds to 80% plus share of this category. Uh both ready to cook which is sitting at 15:29 15 minutes, 29 seconds home consumption dominantly and ready to eat which is on the go consumption at home or outside of home are responding 15:38 15 minutes, 38 seconds very very strongly. ready to cook business uh is growing at about 8% and we have seen sequential improvements over four quarters into this business. 15:48 15 minutes, 48 seconds So our quarterf is sharper closer to about 10 11% versus our blended filler growth at about 8%. Uh what has driven 15:58 15 minutes, 58 seconds this growth is we have invested of course on advertising uh promotion of this business trying to scale up our 16:05 16 minutes, 5 seconds e-commerce business sharper. We also did uh work around expanding the consumption in a single household by larging by 16:14 16 minutes, 14 seconds launching bigger volume pack. These stacks are now taken close to about 6 to 7% share of the ready to cook uh 16:22 16 minutes, 22 seconds business and hence they also would help us continue to drive volume consumption within the household while we continue 16:30 16 minutes, 30 seconds to drive the penetration in this category through our impact in the RT or ready to eat outside of 16:38 16 minutes, 38 seconds phone consumption and also on the go consumption. We have seen accelerated growth driven by two keys. One is we 16:46 16 minutes, 46 seconds continue to work on distribution expansion and there is a significant headroom. In our current assessment we directly reach to about close to four 16:54 16 minutes, 54 seconds and a half to five lap outlets uh uh through our own network but outside of this network also we do reach out 17:01 17 minutes, 1 second because the business is becoming much larger on the go and grow into very small outlets as well. We are seeing 17:08 17 minutes, 8 seconds significant distribution expansion through the wholesale and hawker records in this which is continue to drive an accelerated growth in this business. 17:17 17 minutes, 17 seconds Having said that, our assessment will be we are still close to a million outlets and there is a very large hedge to go 17:25 17 minutes, 25 seconds expanding this business through a combination of distribution expansion in general trade and of course consumption 17:32 17 minutes, 32 seconds on the go which is seeing an increasing uh tailwinds because of the uh expanding good commerce channel in the country. So 17:40 17 minutes, 40 seconds in both these segments we are seeing IP business shifting very strongly. We continue to innovate, bring new offerings in this category especially in 17:49 17 minutes, 49 seconds the high growth RT business. We did launch two new flavors in this uh 17:56 17 minutes, 56 seconds category u uh one is RT wasabi and of course some more variants which got launched during the full year 18:03 18 minutes, 3 seconds perspective also. In addition to that, we are also building our matches business by taking it uh for a wider 18:11 18 minutes, 11 seconds distribution footprint through the launch of reput. 18:16 18 minutes, 16 seconds Moving on to slide number 13, our staple business. I talked about that we have seen strong volume recovery in this 18:24 18 minutes, 24 seconds business. some of the key tenants which are driving this shift. One is [clears throat] we have taken a position 18:31 18 minutes, 31 seconds that we would uh play this portfolio as a one where we could we would want to at 18:38 18 minutes, 38 seconds least protect and drive our volume efficiency and in that context we had done some smart new price point based 18:46 18 minutes, 46 seconds packs. So historically we are a premium player on a per unit price basis. We did launch some new grammage lower gamage 18:56 18 minutes, 56 seconds price point parity packs in quarter 3 in both our superlide and also in our franchise and those have started to shape very well for us in the business. 19:07 19 minutes, 7 seconds We are also looking at distribution gaps in this business. In some places because of our premium positioning we had lost out on distribution. So there is a 19:16 19 minutes, 16 seconds renewed focus on distribution expansion on this portfolio which is also helping us. Third is in the area of entire 19:23 19 minutes, 23 seconds e-commerce portfolio where where we are now investing also on edible oil. So historically we were not really investing on e-commerce portfolio. We 19:32 19 minutes, 32 seconds are now specifically investing on this business and that is also helping us grow back this business. In addition to 19:39 19 minutes, 39 seconds that we are also building our uh other uh play in this business. So you would be aware we also have a oats business 19:48 19 minutes, 48 seconds sitting under fun and also a breakfast business sitting in fun brand. Both of these business are seeing increasing 19:56 19 minutes, 56 seconds traction. We are using e-commerce and modern trade as a channel to drive our growth and we are seeing this business 20:03 20 minutes, 3 seconds also shaping up strongly with the emerging channels. Some new launches in this category in Kodapur. We launched a 20:11 20 minutes, 11 seconds masala oats with millets as a new uh uh category as a new play in this uh oats 20:17 20 minutes, 17 seconds business. Similarly in uh sweet uh size which is high protein segment of oats we launched the high protein chocolate oats 20:26 20 minutes, 26 seconds uh in qualif. So these are new introduction which should also help us expand our franchise and growth on the 20:33 20 minutes, 33 seconds sum uh entire food platform or sra business. Moving on to somewhat uh peanut butter. 20:41 20 minutes, 41 seconds I'm on slide number 14. Uh this business continues to be under pressure in modern trade and e-commerce. In our main state 20:50 20 minutes, 50 seconds general trade channel, this business continues to do well and is growing in uh uh in let's say no single business 20:59 20 minutes, 59 seconds but close to 7 odd% it is growing even in the uh general trade channel but we are losing share in trade and 21:06 21 minutes, 6 seconds e-commerce. What we have started to make shifts around is we are doing increasing innovation focus in this category. This 21:14 21 minutes, 14 seconds category has seen the emergence of high protein variants. In quarter three and quarter four we did launch specifically 21:22 21 minutes, 22 seconds in quarter three we launched seven new variants uh in this which we have started to expand presence and uh 21:30 21 minutes, 30 seconds investments in quarter 4 uh of this year and our focus will be to really build our business by expanding both 21:39 21 minutes, 39 seconds distribution and also throughut from the channel for these innovations which help us gain share back in the high protein 21:47 21 minutes, 47 seconds segment. and also in some of the areas where consumers are looking at bulk packs, big parks at a more efficient 21:55 21 minutes, 55 seconds price points. So those are the two segments we are specifically targeting for peanut butter u and this would continue to grow broader and we are very 22:04 22 minutes, 4 seconds strongly confident on uh making shifts in this business in the peace. 22:11 22 minutes, 11 seconds And now moving to slide 15 uh which is uh on the Belmonte uh catchups and layer portfolio. This business of course sits 22:20 22 minutes, 20 seconds in both uh B2C retail side and also on the B2B side. Uh is of course the 22:28 22 minutes, 28 seconds biggest category of well done as a business. We had a very strong year. We grew up almost like 11% in this business 22:36 22 minutes, 36 seconds fundamentally driven by very strong volume growth of this category. So we are still in the phase of I would say 22:43 22 minutes, 43 seconds expanding gaining share in this category and we are focused on strong volume growth and that connect is reflecting in 22:51 22 minutes, 51 seconds a very strong performance growth in volume and value terms in the year for this business. 22:58 22 minutes, 58 seconds Uh and this business has grown across channels. So it's a holistic growth across food services, organized retail 23:05 23 minutes, 5 seconds across e-commerce and also exports uh food service also we have of course some new customer acquisitions and some line 23:13 23 minutes, 13 seconds extensions in the Mayo portfolio. We also have an export business sitting in Middle East uh for where we supply some 23:21 23 minutes, 21 seconds of our uh products to P accounts and like business etc. And that business also has been growing strongly for us. 23:31 23 minutes, 31 seconds Uh overall if I look at this business tenants uh we will continue to drive volume growth through a combination of 23:38 23 minutes, 38 seconds expanding this business in both B2C and retail and B2B sites and also continue to do innovation. So our uh focus for 23:47 23 minutes, 47 seconds the period ahead will be to also bring in new and grow in some of the additional franchises within the layo side of business where we did some new 23:56 23 minutes, 56 seconds pack in production at a mass price point and these price points would help us get better distribution deeper distribution and accelerated growth for our business. 24:08 24 minutes, 8 seconds I'm now moving on to slide number 16 on the Italian business for uh Delvances. 24:14 24 minutes, 14 seconds This is a combination of our olive oil, pasta dominantly. These are the two main main categories. We also have of course uh dried olives uh in this category. 24:25 24 minutes, 25 seconds This business as I talked about olive oil had seen significant on the commodity side. The prices of olive oil had come down significantly. 24:35 24 minutes, 35 seconds We did pass on the benefit of price reduction, the cost reductions to consumer while maintaining our margin. 24:41 24 minutes, 41 seconds So our margin profile has been consistent and stable on the business. 24:46 24 minutes, 46 seconds These price reductions were purely in line of competitive intensity. We did pass on to the consumers maintaining our 24:53 24 minutes, 53 seconds margins. Outcome of that is we have had a very strong volume growth and intrinsically as I talked about we are 25:00 25 minutes driven on driving volume in this category because all of these categories where mounted plays are fairly high 25:09 25 minutes, 9 seconds growth potential categories. pricing and also even from share perspective in some of the categories like culinary we have 25:16 25 minutes, 16 seconds a significant headwind for growth. So our volume responded very strongly though on the value we have a year where 25:23 25 minutes, 23 seconds value growth was uh negative but fundamentally the premise is to grow volume in this business and that has 25:31 25 minutes, 31 seconds been delivered very strongly. Pasta business also grew by strong 11% in volume terms. Uh again on the back of 25:39 25 minutes, 39 seconds food service and e-commerce business which is of course an emerging category. 25:43 25 minutes, 43 seconds We are still accelerating consumers actions and hence e-commerce business will be very pivotal for driving growth 25:52 25 minutes, 52 seconds in this business. Moving on to slide number 17. Uh e-commerce we are focusing 25:58 25 minutes, 58 seconds very very strongly. If you look at this uh channel is seeing increasing traction especially with the strong growth we are 26:07 26 minutes, 7 seconds experiencing in quick commerce side that business has grown by close to 35%. We also need to factor in that in this 35% 26:16 26 minutes, 16 seconds growth. Again we have the olive oil business and a large part of olive oil business does come from uh e-commerce 26:24 26 minutes, 24 seconds and big commerce channels where we have a value decline. So if I actually uh take out the the value decline the 26:33 26 minutes, 33 seconds growth of this business will be much larger or in excess of 40% for us. Uh what we have also started to do uh is 26:41 26 minutes, 41 seconds use e-commerce increasingly as a platform for driving our new categories where we have significant headroom for 26:50 26 minutes, 50 seconds growth. I talked about the entire ready to eat.com business how e-commerce is playing. Similarly in the Dante portfolio pasta is playing very 26:59 26 minutes, 59 seconds strongly. We do have a break for season play under again back and play notes under fun. Both of them are being 27:07 27 minutes, 7 seconds increasingly leveraged to get a better foothold in the category and our experience is very strong in the last 27:14 27 minutes, 14 seconds few years where we have seen accelerated growth and very strong growth in new emerging categories. What it sets for us 27:22 27 minutes, 22 seconds is it establishes certain uh new categories where we can then play increasingly in the rest of the channel 27:29 27 minutes, 29 seconds which is modern trade and uh general trade once we establish the base of this business in e-commerce. 27:37 27 minutes, 37 seconds Moving to slide number 18. This is on the marketing strength side. I have talked about it uh uh that on the face 27:45 27 minutes, 45 seconds of it what looks like that there is a reduction in marketing spend but what I would want to call out is there is a 27:53 27 minutes, 53 seconds reclassification of visibility spends of close to six cr uh in a single quarter which is actually for the full year we 28:02 28 minutes, 2 seconds are doing the reclassification in line with the guidance we have from IFC uh on how to treat uh visibility 28:10 28 minutes, 10 seconds spends grid. So that reclassification has been done in a single quarter. If I remove that quarter uh uh the other 28:20 28 minutes, 20 seconds quarter impact which is actually getting reclassified, we actually had a flat marketing investment and at the base of 28:27 28 minutes, 27 seconds the organization in quarter four we still had a very strong marketing investment. Overall for the full year of course we have increased our marketing investments by close to 16 close to 18%. 28:39 28 minutes, 39 seconds And that has been also driving our growth in core categories where we are investing strongly. 28:47 28 minutes, 47 seconds Another area I have talked about it again also with I'm on slide number 19 is entire Salesforce automation which we 28:54 28 minutes, 54 seconds are doing in Sunrops. Sanj we are aware covers almost like 475,000 29:01 29 minutes, 1 second outlets directly through a combination of our own dedicated field force which covers about 375,000 outlets and also 29:10 29 minutes, 10 seconds shared field sitting to our distribution network which also covers another 100,000 outlets. So this entire 29:17 29 minutes, 17 seconds dedicated field course which is exclusively covering retail for us. We have uh brought this entire field uh 29:26 29 minutes, 26 seconds post on a biz platform where we have entire mobile enabled ordering and uh 29:34 29 minutes, 34 seconds sellins to the trade plus also crashing on visibility etc. So entire retail execution is now being tracked on a 29:42 29 minutes, 42 seconds mobile app and being delivered on the mobile interface. 29:46 29 minutes, 46 seconds uh I'm very happy to say that we have been able to bring entire dedicated coverage which we have now on this app. 29:55 29 minutes, 55 seconds What it means for the organization is now we are building a much stronger visibility of our high code outlets, 30:02 30 minutes, 2 seconds much stronger visibility of lime sold per outlet, stronger visibility of frequency of all the range range we sell 30:10 30 minutes, 10 seconds in each other and this is really going to be next phase of us where this intelligence will be used in two way. 30:17 30 minutes, 17 seconds One is how do we expand the productivity of our entire field organization and second given that we have two 30:25 30 minutes, 25 seconds organizations Sunro and Del and today both of them are on the same uh uh mobile interface same platform we are 30:34 30 minutes, 34 seconds also creating an opportunity to have an optimized coverage for outlets which are low throughput versus having a dedicated 30:42 30 minutes, 42 seconds coverage for outlets with high high throughput. So this would really pave way in two ways for us in the year ahead where we'll start having a more 30:51 30 minutes, 51 seconds optimized coverage and also expanding the efficiency or throughput from the outlets where we currently get certain businesses. 31:00 31 minutes Moving on to slide number 20. Uh we have been talking with through the years gone by that there is a very very high focus 31:08 31 minutes, 8 seconds on ensuring that we have much stronger margin profile in the business. So we have looked at all our costs very 31:16 31 minutes, 16 seconds strongly through the year. We also worked with some uh external partners over uh quarter 2 and quarter 3. Uh and 31:25 31 minutes, 25 seconds all of those programs led both internally and also through external partners have helped us deliver 31:31 31 minutes, 31 seconds significant improvement in our uh margins driven primarily in the area of manufacturing costs and logistics. So if 31:40 31 minutes, 40 seconds I look at at a full year we have delivered close to 300 basis points improvement. If I look at quarter four 31:48 31 minutes, 48 seconds this is close to about 421 basis points improvement. So sequentially also we have moved up in margin. Uh what you may 31:56 31 minutes, 56 seconds notice here is that material margins uh uh improvement has come down in quarter 4. This is primarily because we did see 32:04 32 minutes, 4 seconds inflation in edible oils in quarter 4 and that has impacted material margins fairly adversely. But we have of course passed on those increases to consumers. 32:14 32 minutes, 14 seconds So this is only a transient impact. 32:16 32 minutes, 16 seconds Going forward you will see the margin improvements coming back because all of this has been passed on to the consumers 32:23 32 minutes, 23 seconds uh in uh in the period of end of March to April. 32:30 32 minutes, 30 seconds Uh moving on to slide number 21. We have a significantly high focus now on innovation. We did almost like 70 plus 32:39 32 minutes, 39 seconds launches uh in the last year. Uh and these have given almost like a 4% of overall sales for us. Uh we are seeing 32:48 32 minutes, 48 seconds very strong traction on uh new products as a future source of growth for the organization. 32:56 32 minutes, 56 seconds Next two slide uh team are on uh reported financials because they are not comparable. I'll move straight to slide 33:04 33 minutes, 4 seconds number 24 which is comparable financial where we have taken Delmone financials 33:11 33 minutes, 11 seconds for the full year as it uh for the full quarter and full year for a life-to-life comparison. uh you would recall our 33:19 33 minutes, 19 seconds Delmont business was integrated uh into consolidated into into reporting for Sunrop only from February 2025 and hence 33:29 33 minutes, 29 seconds reported financials are not comparable but what you see on slide 24 is our performance for the quarter so very 33:36 33 minutes, 36 seconds clearly growth strong momentum 11% growth uh margins I talked about more or 33:43 33 minutes, 43 seconds less very uh similar margin profile at a material cost level but significantly enhance margin profile by taking a very 33:52 33 minutes, 52 seconds strong uh improvement in our other expenses which is where our manufacturing and logistic expenses and also our SDN dominantly sits. 34:01 34 minutes, 1 second Advertising I have already called out while it shows uh negative but on a real basis it is flat investment and it is 34:09 34 minutes, 9 seconds close to about 8 o invest 91 cr investment we have done in this quarter for uh building our brand. So our 34:17 34 minutes, 17 seconds investment profile remains at about 5 to 6% of top line uh in the business. Uh as 34:24 34 minutes, 24 seconds an outcome of this data uh I would I'm happy to share that taking out the oneoff expenses which is around uh in 34:31 34 minutes, 31 seconds this quarter which is primarily around uh weight bill and also the esop expense which continues uh into this quarter also our is at 7.2%. 34:42 34 minutes, 42 seconds significant improvement from last year. 34:45 34 minutes, 45 seconds Absolute number also again a significant improvement from last year and also this is something which you could see as a 34:52 34 minutes, 52 seconds stable base we have built now for the organization uh today. So I would say 7% is let's say a new base which the organization is coming towards. 35:03 35 minutes, 3 seconds uh if I do the same uh assessment on slide 25 and on slide 25 for the full year level we have of course uh grown 35:12 35 minutes, 12 seconds 10% on topline our margin as I've talked about for the full year stands at about 5.7% of a data uh and our advertisement 35:23 35 minutes, 23 seconds in expenses has been a 18% growth over last year so clearly as I speak about these numbers we have seen consistent 35:32 35 minutes, 32 seconds improvement in margin profile as we have moved through the year with the exit quarterfall number sitting close to 7% of a beta for the organization. 35:43 35 minutes, 43 seconds And now last slide slide number 26 it's a quick recap of why this portfolio is very attractive. I'm just summarizing it 35:51 35 minutes, 51 seconds for all of us. One of course very strong brands uh play in a food business which is very attractive high growth business. 36:00 36 minutes There are all consumer developments which are driving the consumption of packaged foods in the country. We of course have very strong seats, very 36:09 36 minutes, 9 seconds strong brands which can uh which play in the high margin, high growth categories and we do have a very strong headroom 36:17 36 minutes, 17 seconds for growth both either in terms of expansion of the category where we occupy a leadership position and also in 36:24 36 minutes, 24 seconds area of share game in categories where we do have a very strong brand very high quality product but today the share is 36:32 36 minutes, 32 seconds much lower and hence a significant headroom for share And we would do through do this through 36:38 36 minutes, 38 seconds investing ahead of curve on media and also making sure that we leverage the complimentarity of the two set of 36:46 36 minutes, 46 seconds organizations which is Sen and Belmont from both uh our sales or footprint point of view and also leveraging our 36:55 36 minutes, 55 seconds manufacturing and performance trends to drive efficiency on the business. So that's it from my side and I'm now 37:02 37 minutes, 2 seconds handing it back to the team so that we can have question and answers from all of us. Thank you so much. 37:10 37 minutes, 10 seconds Thank you very much ladies and gentlemen. We will now begin with a question and answer session. 37:16 37 minutes, 16 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. 37:22 37 minutes, 22 seconds If you wish to remove yourself from the question queue, you may press star and two. 37:28 37 minutes, 28 seconds Participants are requested to use handsets while asking a question. 37:33 37 minutes, 33 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 37:48 37 minutes, 48 seconds We take the first question from the line of Shir Pesi from Motil. Please proceed with your question. 37:55 37 minutes, 55 seconds Hi sir, good afternoon and thank you for the opportunity. [clears throat] Uh sir I have three questions. Starting 38:02 38 minutes, 2 seconds first question uh over one year we have done the integration of two businesses. 38:08 38 minutes, 8 seconds So this 10% growth what we have got what is the journey today have we completed the entire integration because we were 38:16 38 minutes, 16 seconds saying that the two businesses are completely different but they complement in terms of B2B and in terms of B2C. So 38:23 38 minutes, 23 seconds what benefits we have extracted and what is the strategy going forward? 38:31 38 minutes, 31 seconds Okay. Uh any other questions also Shirish? 38:35 38 minutes, 35 seconds Yeah. Uh my second question is on the popcorn. 38:39 38 minutes, 39 seconds I think the growth in ready to eat is humongous. So I just wanted to check upon two three things. What is the 38:47 38 minutes, 47 seconds distribution uh of RT uh ready to eat and in the overall popcorn business what 38:53 38 minutes, 53 seconds is the contribution of ready to eat? uh of course flavor strategy has worked but what else can happen in this category 39:01 39 minutes, 1 second and third and uh on the margin front now we have stabilized but I think there is also an angle that 5% GST 39:09 39 minutes, 9 seconds rationalization has happened the industry has got lot of tailwind but similarly we have a palm oil which is rising and there is a packaging cost 39:17 39 minutes, 17 seconds because uh in a small package the packaging cost is much higher I would assume that it would be about 10 11% for us as a percentage of sales So these 39:26 39 minutes, 26 seconds these two three cost items are going to go up. What is the strategy to maintain or improve the margin? 39:34 39 minutes, 34 seconds Sure. Right. So thank you Shish. I'll go one by one. I'll start with the first question which is on integration. Uh 39:43 39 minutes, 43 seconds right now in the last full year of journey as a consolidated organization we have focused on getting efficiencies 39:51 39 minutes, 51 seconds on the business on a standby basis. We have not really done any integration of the business. Only marginal movements 39:59 39 minutes, 59 seconds have happened. I can talk about some of those but at a fundamental level the two companies continue to operate independently. The area where we have 40:07 40 minutes, 7 seconds started doing integration one is in the back end of CFA network the two organizations right on and uh that's one 40:15 40 minutes, 15 seconds area we have picked on. Second, we also did one experiment with starting baby in koro where we started leveraging sundrop 40:24 40 minutes, 24 seconds wider distribution reach for using uh for driving the distribution of ben 40:31 40 minutes, 31 seconds ketchup and cabin mayo business in the general trade. So these are the early signs which you have seen right now if 40:38 40 minutes, 38 seconds the organization continue to operately operate independently where we have been able to drive efficiency is purely on the area of 40:47 40 minutes, 47 seconds standalone the way the organization had our manufacturing footprint we were seeing increased scale of business of 40:55 40 minutes, 55 seconds course in some areas but our cost structures were not sufficiently challenged. So we have done a significant assessment of our 41:03 41 minutes, 3 seconds manufacturing cost. How do we improve our line efficiencies? How do we do better production plannings etc. And each of them has driven our efficiency. 41:13 41 minutes, 13 seconds Similarly, when it comes to selling our end consumer which is through a network of CSA, how do we improve our driving 41:20 41 minutes, 20 seconds freight costs through use of reverse auctions etc. There have been significant work done on those areas and 41:28 41 minutes, 28 seconds that is what is driving improvement in efficiency or margins of close to 4% for a business growth. You ask me about so 41:36 41 minutes, 36 seconds as of now these growths are dominantly standalone growth of two businesses because uh using each other's strength 41:45 41 minutes, 45 seconds has not yet happened. I also talked about the fact that we did our entire sales uh field force on biz. This is a 41:54 41 minutes, 54 seconds very critical pillar for us to get into a journey of leveraging the distribution strength of two organizations without creating any kind of integration losses. 42:06 42 minutes, 6 seconds So today we are in a place we are where we are starting to understand the entire coverage of two organizations and be 42:14 42 minutes, 14 seconds able to compare them because the entire field force today is on a mobile app and we have an outlet by outlet 42:21 42 minutes, 21 seconds understanding being developed for what is the potential of each outlet in each of the businesses. This will this is 42:28 42 minutes, 28 seconds what will pave way for us to decide on a very optimal coverage strategy for an for the organization. So this will come 42:38 42 minutes, 38 seconds I would say in the year two years ahead where we'll leverage some complimentarities and say how do we do 42:46 42 minutes, 46 seconds uh coverage of our network more efficiently and this would happen in next 24 months. Second question I'll let 42:53 42 minutes, 53 seconds Ash answer. I'll move on to third question which is on the GST rationalization. 42:59 42 minutes, 59 seconds So GST rationalization we are aware the entire benefits were passed on to the consumers. So uh like any other 43:06 43 minutes, 6 seconds organization when GST benefits were announced we had either to increased damages or reduce prices given the 43:15 43 minutes, 15 seconds benefits to the end consumers. In the period of course in the last two months we have seen inflation in edible oils. 43:23 43 minutes, 23 seconds We have seen inflation in packaging costs. Again those increases we have passed out to the consumers very 43:31 43 minutes, 31 seconds similarly either through price increases or damage reductions. So at a fundamental level our margin profile does remain stable as we stand today. 43:42 43 minutes, 42 seconds uh we are in uh to a larger question if this continues as a trajectory how do we see playing it up. So clearly the 43:51 43 minutes, 51 seconds organization focus is on driving upselling also in our core packs. So in ready to cook business for example we 44:00 44 minutes talked about how we are looking at a 20 and a 30 price point which is what we are now focusing to expand and today 44:06 44 minutes, 6 seconds that has become close to about 6% of our business. So there is clearly a place to say how do we also upgrade upstream 44:15 44 minutes, 15 seconds consumer. Similarly IT business we are driving big time growth through e-commerce with commerce which is what 44:22 44 minutes, 22 seconds is also driving impact consumption without necessarily being a price point of a big which is more around the very 44:29 44 minutes, 29 seconds small uh which is more around a small outreach strategy. So we are playing the hybrid bid strategy to make sure that we 44:37 44 minutes, 37 seconds do build a profile of business where we have a play of bigger pack sizes at a much higher level and that is of users 44:46 44 minutes, 46 seconds confidence that our market will be stable in database. Uh yeah shish thank you for the ask question. So as you rightly mentioned 44:55 44 minutes, 55 seconds active popcorn is now um overall bigger than a 400 cr brand at the net sales level the and the brand has been growing 45:03 45 minutes, 3 seconds at about 18%. As we had mentioned the contribution between uh ready to eat and ready to cook is now about 1/3 2/3 is 45:12 45 minutes, 12 seconds about 34% 66% or a popcorn business which means RTE from value wise is about 45:18 45 minutes, 18 seconds 34% of business and RTC is about 66% close to that. Now we continue to follow what we have always said. One we will 45:28 45 minutes, 28 seconds keep looking at appearing the consumers to bigger tasks both on RTC and RTE. Uh 45:35 45 minutes, 35 seconds in both these cases for example in RT which is out of home consumption the convenience channel of quickcommerce is 45:44 45 minutes, 44 seconds what is driving our growth and bigger packs. So we are almost growing in bigger packs as compared to smaller packs by almost 10 percentage points 45:53 45 minutes, 53 seconds faster right which is the fact which is doing our margin expansion. Now the salency that we built for brand for our 46:00 46 minutes distribution reach is through the 10 rupee packs right and that continues even in RTC. So RTC 20 and 30 rupee 46:09 46 minutes, 9 seconds price points were now which are now contributing sufficiently to our total contribution and that's a gradual journey. So both inh home out of home 46:19 46 minutes, 19 seconds two occasions different channels bigger part being focused and new consumer acquisition happening through the 10 46:26 46 minutes, 26 seconds rupees rice fun okay yeah one follow up 46:34 46 minutes, 34 seconds I'm sorry to I'm sorry to interrupt may request you to join the question queue sir and we have several participants waiting for the time okay all right thank you and all thank you thank you 46:43 46 minutes, 43 seconds thank you thank you so much before We take the next participant. A reminder to all the participants. Please restrict your questions to two per participant. 46:53 46 minutes, 53 seconds The next question is from the line of sites desmuk from IFL Capital. Please proceed. 47:01 47 minutes, 1 second Uh hi sir, this is Percy Pansuki here. 47:04 47 minutes, 4 seconds Uh my first question is on the uh uh merger synergies. Um uh of course we've 47:11 47 minutes, 11 seconds done well in terms of growing our uh fullear uh EIDA this year versus the last year but uh uh now that you've sort 47:20 47 minutes, 20 seconds of had both these businesses under your belt for uh about 12 months can you give us a little more granular plan in terms 47:29 47 minutes, 29 seconds of realizing the merger synergies both in terms of uh action points uh uh the 47:37 47 minutes, 37 seconds timelines for the action points and the kind of uh uh uh quantification of cost benefits that can occur uh on account of these actions. 47:48 47 minutes, 48 seconds Uh right uh Percy right uh because moderator said Sudesh I'm just do we have Py here? 47:57 47 minutes, 57 seconds Yeah yeah yeah Percy I just dialed in through my colleague Siddesh's line. 48:03 48 minutes, 3 seconds Okay guys yeah hi Percy good afternoon to you. uh so yes uh see uh I'll talk you through how we are going about the 48:11 48 minutes, 11 seconds journey now so one we talked about the entire sales enablement which is a very critical data feed for our integration 48:18 48 minutes, 18 seconds decisions second is the entire back end or operations where two organizations are wired differently and we need to 48:26 48 minutes, 26 seconds bring them on same platform so the second area of work which is going on as we speak right now is in the ERP integration two organizations are 48:34 48 minutes, 34 seconds operating on different ERP But we are now embarking or we have now embarked on a journey to get them on a 48:41 48 minutes, 41 seconds common ERP and this we expect to finish in a period of about 12 to 14 months from now. So somewhere in the period of 48:50 48 minutes, 50 seconds June to uh August we should be through with integration and a common ERP platform for those organizations. 48:59 48 minutes, 59 seconds I talked about entire intelligence we have built around sales network that we should be able to rectify and let's say 49:06 49 minutes, 6 seconds build a game plan in another 6 to9 months from now where we would be able to decide what is the most optimal 49:14 49 minutes, 14 seconds coverage strategy which which in a sense means that uh leveraging efficiencies in the area of a commonization footprint 49:23 49 minutes, 23 seconds will dominantly follow in FI28. So FYI 27 will continue to be the path of 49:30 49 minutes, 30 seconds building the entire uh understanding and building the backbone for organization on which two organization operate on a 49:38 49 minutes, 38 seconds single backbone and FI28 is where the harmonization and some kind of efficiency takeouts will start happening 49:46 49 minutes, 46 seconds at the full organization level. Having said that in FI27 we will continue our CFA integration journey. We will 49:55 49 minutes, 55 seconds continue to leverage strength of complimentarity of organization. So if I have to give you a broader viewpoint, 50:03 50 minutes, 3 seconds one could expect a 100 bits take out from the Germany in next one year and another 150 to 200 bits take out in 50:12 50 minutes, 12 seconds Germany in FI 28 to primarily coming through efforts around leveraging organizations strength and complimentarity. 50:24 50 minutes, 24 seconds Uh that's very helpful sir. Uh uh uh so while uh uh uh uh you've given uh uh 50:32 50 minutes, 32 seconds sort of uh idea on the merger synergy uh benefits on uh basis points of sales. Uh my next question focuses more on the 50:42 50 minutes, 42 seconds total AIDA margin expansion delivery. uh like this year I think uh on a a merged entity you have delivered uh 250 basis points plus of uh AIDA margin expansion. 50:54 50 minutes, 54 seconds uh should we assume a similar journey for uh uh the consolidated entity for the next uh couple of years in terms of 51:03 51 minutes, 3 seconds about 200 to 250 basis points uh margin expansion for each year coming partially 51:10 51 minutes, 10 seconds through the merger synergies, partially through uh portfolio uh uh uh uh rationalization or diversification 51:19 51 minutes, 19 seconds partially through uh leverage of topline growth or any other kind of uh benefit. 51:24 51 minutes, 24 seconds benefits that might occur at a total level. 51:27 51 minutes, 27 seconds Yes. So uh so firstly yes I would say the range would be between 150 to 235 odd basis points in that range one would 51:36 51 minutes, 36 seconds be coming as a management we will be coming in that range. 51:40 51 minutes, 40 seconds So somewhere close to 200 that could be uh a little plus minus let's say 25 to 51:46 51 minutes, 46 seconds 50 bits here or there also possibly but it never used to get into that. industry. 51:53 51 minutes, 53 seconds So, so by this math uh can we say that by FYI 29 you will definitely be in a double digit uh uh margin territory uh which is 3 years from now? 52:05 52 minutes, 5 seconds Yes, that is the intent. Yes. 52:09 52 minutes, 9 seconds Understood. Uh uh secondly on uh the two problem categories which is the Italian 52:15 52 minutes, 15 seconds and the spreads. Uh what are uh uh if you can just help me uh uh very briefly 52:23 52 minutes, 23 seconds what is the problem due to which these categories are declining? What is the solution if at all you have to stem this 52:31 52 minutes, 31 seconds decline and uh by when you expect uh uh these measures to result in the categories coming back to growth. 52:39 52 minutes, 39 seconds Right. So on Italian I'll request Abina to answer this for you and then Ashish can explain on the straight side. So Abina requesting you to take on this 52:48 52 minutes, 48 seconds question on Italian is CEO for Del Monte cos. 52:53 52 minutes, 53 seconds Thanks Sesh. Good afternoon. Uh okay so as far as the Italian portfolio is concerned this is one portfolio where Del Monte today is currently if you look 53:01 53 minutes, 1 second at the overall share we're roughly the third in the country behind Cigaro and Bodis. Now addressing the issues around the category which we have faced last 53:09 53 minutes, 9 seconds year is primarily on account of the deflation on the overall commodity side which has happened this is completely imported as far as olive oil is concerned. Now that entire price benefit 53:18 53 minutes, 18 seconds is something that we have passed to the end consumer and therefore in the process there is a value decline that one has seen but as Nishad shared in the presentation earlier there is roughly 53:26 53 minutes, 26 seconds about a 17% volume growth that we already seen last year and now I think these price corrections are behind in our base from quarter 1 onwards and 53:34 53 minutes, 34 seconds therefore from quarter two onwards like to like we would start seeing healthy value growths that's one part of it on the demand generation side what we're 53:42 53 minutes, 42 seconds also doing is there is a fair amount of equity as I said that the the brand carries on the entire Italian portfolio. 53:48 53 minutes, 48 seconds We're going to be launching a fairly massive Italian owned Italian space campaign starting from quarter 2 which also should bring a lot of demand from 53:56 53 minutes, 56 seconds this particular category perspective. So we are very optimistic that things should definitely turn around from quarter 2 onwards for sure. 54:04 54 minutes, 4 seconds So this price cut is not at margins or anything like that right? 54:11 54 minutes, 11 seconds I'm sorry can you repeat the question please? 54:15 54 minutes, 15 seconds uh price cut has not resulted in any uh margin deterioration, right? 54:21 54 minutes, 21 seconds No, we've not seen any significant margin deterioration. The pricing was largely benefit. 54:29 54 minutes, 29 seconds It wasn't a margin reduction. 54:33 54 minutes, 33 seconds Okay. But the question of and on spreading yeah on spread right on the peanut butter category. Um so there are two parts. 54:43 54 minutes, 43 seconds What is that? Even while we say that there is a 7% decline happening on the overall uh spread in the business, if 54:50 54 minutes, 50 seconds you split it into the big pack which is more commoditized versus the small consumer part, we have had a very good growth of double digit in volume and 54:58 54 minutes, 58 seconds unit terms. In terms of the small pack where we struggled was the entry of lowriced competitive players in the 55:06 55 minutes, 6 seconds commoditized section. Here our strategy over the last 3 4 months has been to look for more competitive sourcing. 55:14 55 minutes, 14 seconds Having done that now we are placed to competitively compete with these people who are eroding our market share on 55:21 55 minutes, 21 seconds basis of price. Right? So that we have uh done we are gradually now filling up the gap and fighting them straight head 55:30 55 minutes, 30 seconds on in terms of the price at the bigger pack level. So that's one part we have fixed. It is happening and that's where 55:37 55 minutes, 37 seconds we are now starting to see benefit but it takes a little while because the area that they have occupied it's taking us 55:44 55 minutes, 44 seconds time to get them to vacate it. That's one. The second was on the chocolate side of the business which was the fast 55:51 55 minutes, 51 seconds moving category or the fastest growing in e-commerce which we said we have now launched products uh certain new products in the segment which is helping 56:00 56 minutes us premiumize and start getting share there through the e-commerce investment we believe we will start gaining share 56:07 56 minutes, 7 seconds there and start moving the category um overall if you look at we have had a margin expansion on peanut butter so the 56:15 56 minutes, 15 seconds price correction was through better sourcing right and not by trying to we did a price cut so it had an impact on top line but not in terms of the margin 56:24 56 minutes, 24 seconds so we had a margin expansion by Q2 again this year we also expect that we will be to start you know uh negating the impact 56:32 56 minutes, 32 seconds of the losses and we start gaining uh volume growth say from quarter two onwards 56:41 56 minutes, 41 seconds got it that's all for me thanks and all the best thank you Thank you. The next question 56:48 56 minutes, 48 seconds is from the line of Henil Bagaria from Equ. Please go ahead with your question. 56:54 56 minutes, 54 seconds Thank you for the opportunity sir. So two quick questions one on popcorn and peanut butter. On the peanut butter side uh we've launched a few products. I 57:03 57 minutes, 3 seconds think in the earlier quarter we launched one in the protein pack and the omega3 and current in the chocolate and the jaggery one. So these products are actually still there in the market by 57:11 57 minutes, 11 seconds some of our peers like my fitness mental or Alpino. So how would you uh price a product because I think so on the Q in 57:18 57 minutes, 18 seconds the Q3 that we had launched we had put a downward we had priced it a notch below the RP also. So what is the kind of 57:25 57 minutes, 25 seconds sales pattern that we are seeing there and is there similar strategy are we going to replicate on the new launches and going forward do you see uh our 57:34 57 minutes, 34 seconds products being a notch lower or do you see something very similar to our peer pricing? 57:41 57 minutes, 41 seconds Okay. Uh so so thank you so much for this question. So yes you're right uh we had seen uh impact on uh new on the side 57:50 57 minutes, 50 seconds of high protein segment with new players coming in and building the category on the promise of high protein. Uh we have 57:58 57 minutes, 58 seconds built the gaps bridge the gaps on that side and launched these products in product and they have been in the stage 58:05 58 minutes, 5 seconds of listing. So generally to get an initial traction and initial momentum even if you look at players like Bitness 58:13 58 minutes, 13 seconds and Zindola which you mentioned they do give some kind of discounting we have also given that to build some kind of initial momentum and trials. The entire 58:21 58 minutes, 21 seconds focus is to get a trial. Our product is very competitive. Our product is actually a shade better I would say in terms of protein delivery versus 58:29 58 minutes, 29 seconds competition. So we have also tried to improve the product profile in terms of protein delivery etc. And what you see 58:37 58 minutes, 37 seconds today right now is possibly more to get initial trials and uh entry of consumers into our grand promise of high protein. 58:46 58 minutes, 46 seconds We were never in the position or space of high protein. Historically we were always in the position of family tablesp consumption as a strength and immunity 58:55 58 minutes, 55 seconds builder. So getting into the protein segment we are giving some kind of incentives for trials but this will be 59:03 59 minutes, 3 seconds primarily to get trials into the category. Our larger play would be to ensure that this category remains or retains the premiumness which consumers 59:11 59 minutes, 11 seconds are today willing to play pay. So it's more a transient strategy not a not a longer term play to play in that dimension. 59:22 59 minutes, 22 seconds And of course there are media investments in uh both in digital media and also on performance marketing investments on the channel which are 59:30 59 minutes, 30 seconds going behind this portfolio to make sure that we also attract new newer users and also of course the current protein users in the category. 59:41 59 minutes, 41 seconds Okay. For the popcorn side, we've got a range from 10 to 60 bucks with average about 30 35 rupees and you said that that is actually bound to go up as the 59:50 59 minutes, 50 seconds larger packs increase. So since we have also launched the caramel bliss and the cheese flavor that is to compete with some of our peers in the in the market 59:58 59 minutes, 58 seconds which obviously sells at a higher price even there we are downward priced I probably that is because we are it's an introductory range. So how do you see 1:00:05 1 hour, 5 seconds the number of the average price that is uh that will go up from 30 35 to I mean what number when you are aiming at a double digit margin and also if you 1:00:14 1 hour, 14 seconds could also mention some things about the Smackco brand because we could leverage a lot of things out there in the guilt cream side uh especially uh I mean even 1:00:22 1 hour, 22 seconds at the peanut butter which is a very saturated market we can get into peanut snacks which we do have but more on the peanut energy bar or high protein bar or 1:00:30 1 hour, 30 seconds something of that sort if you could also give a macro overview out And in this entire gamut, how do you see 1:00:37 1 hour, 37 seconds the QC mix with the GT uh going forward and in the marketing spends how do you see the marginal spends towards a new 1:00:46 1 hour, 46 seconds brand initiatives and new product initiatives there? 1:00:50 1 hour, 50 seconds Yes. So, so I'll just add a flavor to your comments on popcorn. See, popcorn we have uh we actually enjoy much better 1:00:57 1 hour, 57 seconds margins on bigger bags. So today while you may see on certain packs we see marapria lower than competition 1:01:06 1 hour, 1 minute, 6 seconds but clearly our value addition in margin from the price points where we are today prevailing also is very very strong. Our 1:01:15 1 hour, 1 minute, 15 seconds entire focus honestly is on building the category. We are today as a popcorn player we are doing a fair pricing. Of 1:01:22 1 hour, 1 minute, 22 seconds course bigger pack as I said enjoy bigger margins also but endeavor is to really drive on the consumption of popcorn categories. So we are really 1:01:31 1 hour, 1 minute, 31 seconds looking at IP popcorn as a category building thought and not necessarily as a thought to say can I take the price 1:01:39 1 hour, 1 minute, 39 seconds leather up. We will take the price leather up by launching newer variants and newer products. So in our period 1:01:46 1 hour, 1 minute, 46 seconds ahead you will see more innovative flavors and offering coming in some of which will also take the price table up 1:01:54 1 hour, 1 minute, 54 seconds for us as a business. We are not really competitively benchmarking because our leadership position is fairly dominant 1:02:00 1 hour, 2 minutes in this category. Our thinking is driven by expanding categories and really looking at uh competition which is 1:02:08 1 hour, 2 minutes, 8 seconds operating in pockets really not a mass player or a mass competition or a widespread competition for us. 1:02:15 1 hour, 2 minutes, 15 seconds competition is dominantly pocketled play for us category is a omni channel player and we would play an omni channel game 1:02:22 1 hour, 2 minutes, 22 seconds in this where we keep of course building distribution building uh trials and also upgrading consumers through more 1:02:30 1 hour, 2 minutes, 30 seconds attractive newer flavors and formats uh on your question on uh protein again 1:02:36 1 hour, 2 minutes, 36 seconds right uh uh so could you just quickly repeat that question for me I'll uh with the focus on protein in in peanut 1:02:46 1 hour, 2 minutes, 46 seconds butter segment. So there are some white spaces which we are trying to fill. We also have a brand called Snacko. It's not being featured the presentation but it's still there. It's like where it's a 1:02:55 1 hour, 2 minutes, 55 seconds guilt-free brand where we are focused on no GI big pop etc. So out there do we plan to get more into more into products 1:03:04 1 hour, 3 minutes, 4 seconds like on the energy bar segment because we've also seen a lot of MN in the market where brands are focusing there just trying to get the protein and the 1:03:11 1 hour, 3 minutes, 11 seconds entire whole foods into uh the play so our biggest strategy is to build 1:03:19 1 hour, 3 minutes, 19 seconds three core brands which is actu sunrop and uh del monte building another brand into 1:03:27 1 hour, 3 minutes, 27 seconds let's say contiguous category is not the thought on which we will play. If we have to build contiguous categories, some of which you mentioned are 1:03:36 1 hour, 3 minutes, 36 seconds attractive categories for us also, we would when we decide to build those categories, we would build them more 1:03:44 1 hour, 3 minutes, 44 seconds through the current set of brand play than really getting into a completely new brand. Unless of course some of these can be done through an extension. 1:03:52 1 hour, 3 minutes, 52 seconds For example, when you look at Pops range which is sitting in our breakfast cereal, it is Sundrop Pops and Sundrop 1:04:00 1 hour, 4 minutes is more an assurance or a mother brand clay versus Pops is more a uh limit. So you will see that kind of play coming in 1:04:08 1 hour, 4 minutes, 8 seconds where we have the equity of mother brand giving the trust to consumers to try it out while a subbrand or a variant may 1:04:17 1 hour, 4 minutes, 17 seconds come in as a uh as a relevant proposition for that category. So that's the play we will play. But some of the 1:04:25 1 hour, 4 minutes, 25 seconds categories which you mentioned they are attractive categories business as we go into our journey of expanding businesses 1:04:32 1 hour, 4 minutes, 32 seconds and getting into newer products some of them will feature in our innovation game plan. Today we are focused around the core and building innovations around the 1:04:41 1 hour, 4 minutes, 41 seconds core but you will see some of these also coming in due course of next let's say 18 to 24 months. 1:04:48 1 hour, 4 minutes, 48 seconds I don't want to. 1:04:51 1 hour, 4 minutes, 51 seconds So also lastly on the marketing spends, how do you see it shaping up on especially the marginal marketing spends on the new brands and new? 1:05:00 1 hour, 5 minutes So see we are playing the entire our entire strategy is to expand margin and deploy at least uh 50% of them back to 1:05:10 1 hour, 5 minutes, 10 seconds drive growth. So that's so we are playing the strategy of uh profitable growth. We intrinsically understand and 1:05:19 1 hour, 5 minutes, 19 seconds believe that marketing spend will be very critical for accelerating the growth. Our ambition will be to grow at least 4 to 5% higher than where we today 1:05:27 1 hour, 5 minutes, 27 seconds are. And today we are reaching to about 5 to 6% of spends. In a longer play, I would want to be sitting at around 8 to 1:05:36 1 hour, 5 minutes, 36 seconds 9% of spends. Of course when I looking at on the relevant category portfolio where we spend this will become a double 1:05:43 1 hour, 5 minutes, 43 seconds digit spends from the portfolios where we spend perspective and that to me is is a direction on which I would want to 1:05:51 1 hour, 5 minutes, 51 seconds go. So we would create margin expansions going forward deploy a reasonably large 1:05:58 1 hour, 5 minutes, 58 seconds part maybe 40 to 60% range of that margin expansion back to acquiring consumers and back to uh growing or 1:06:07 1 hour, 6 minutes, 7 seconds accelerating our growth from this. So that's the play you would see from us as a business. So you would see marketing 1:06:14 1 hour, 6 minutes, 14 seconds growing ahead of our topline growth and potentially over next two years gets to 1:06:21 1 hour, 6 minutes, 21 seconds around 8% of top line as an organization while on the categories where we invest it may be sitting in a double digit number. 1:06:33 1 hour, 6 minutes, 33 seconds Sorry to interrupt Mr. Hil may be requested to join the question Q sir we have several people waiting for that. 1:06:40 1 hour, 6 minutes, 40 seconds Yeah thank you so much. Yeah, thank you. 1:06:43 1 hour, 6 minutes, 43 seconds Thank you ladies and gentlemen. Due to time constraint, we are taking the last question for today from the line of Prates Jira from Lucky Investments. 1:06:50 1 hour, 6 minutes, 50 seconds Please proceed with your question sir. 1:06:52 1 hour, 6 minutes, 52 seconds Yes sir. My question is on the differential growth and gross margin between the core categories and the non-core categories. So when you 1:07:00 1 hour, 7 minutes identify four categories at 65% of the business uh and from your presentation of like to like 10% growth right when 1:07:09 1 hour, 7 minutes, 9 seconds you there's one slide where you have given uh Del Montes fully number and you know there's a 10% growth so is it 1:07:16 1 hour, 7 minutes, 16 seconds possible to just give some indication on the core category and non-core category growth yes so aggregate 1:07:24 1 hour, 7 minutes, 24 seconds broadly yeah so broadly I will say if you look at most of our core categories or sorry all of our core categories are 1:07:33 1 hour, 7 minutes, 33 seconds sitting in food as a as a platform and one of our large categories which we haven't called out in the course which 1:07:40 1 hour, 7 minutes, 40 seconds is edible oil which is sitting in a space which is commodity in nature right 1:07:47 1 hour, 7 minutes, 47 seconds so if I look at our margin profile of our food business our gross margin profile will be close to around 25% as 1:07:55 1 hour, 7 minutes, 55 seconds an organization and uh foods will be about 4 to 5% higher and edible oils will be about 5 to 7 7 to 8% lower than 1:08:04 1 hour, 8 minutes, 4 seconds that. That's the way to look at it. In in foods, we also have some categories which are not core but margin is not 1:08:11 1 hour, 8 minutes, 11 seconds very differential. Margin is still in the range of uh 28 to 30% range in most of the categories there. 1:08:21 1 hour, 8 minutes, 21 seconds So you said that from the gross margin perspective company level is 25% food is 30 and edible oil is 20. Right? That's how I have to write. Read it. 1:08:30 1 hour, 8 minutes, 30 seconds Yes. Yeah. And and just as a clarification, our gross margin definition excludes uh uh basically it 1:08:38 1 hour, 8 minutes, 38 seconds excludes material cost, it excludes uh manufacturing cost and it excludes freight and logistics also. 1:08:47 1 hour, 8 minutes, 47 seconds Okay. And on the growth side uh aggregate core categories which is 65% of your business would have grown at what rate in value and volume? 1:08:56 1 hour, 8 minutes, 56 seconds So, so this year our growth on core categories will be about 12 to 13%. uh 1:09:04 1 hour, 9 minutes, 4 seconds why I it's not very different let's say is because oil has also done reasonably strongly this year though of course oil 1:09:10 1 hour, 9 minutes, 10 seconds growth was uh dominantly a price growth except of course in quarter 4 where we have also seen strong volume growth in 1:09:18 1 hour, 9 minutes, 18 seconds the edible oil business and this 12 13% value and volume will be how much in that 1:09:26 1 hour, 9 minutes, 26 seconds so I think each category has a different volume profile we had given the flavor of volume versus value in each. So that 1:09:34 1 hour, 9 minutes, 34 seconds you have in the uh data which you have already shared. 1:09:38 1 hour, 9 minutes, 38 seconds Okay sir of 8 to 8 to 15% volume growth between various categories. 1:09:45 1 hour, 9 minutes, 45 seconds So it is uh hello. 1:09:52 1 hour, 9 minutes, 52 seconds Yes we yeah uh this answers my question sir. Thank you very much. Thank you so much. Thank you. 1:10:00 1 hour, 10 minutes Thank you. 1:10:04 1 hour, 10 minutes, 4 seconds Uh sorry if there are any more questions I would I would request we uh participant can reach out to Kita our company secretary and we will be happy 1:10:12 1 hour, 10 minutes, 12 seconds to get back to you with our answers. We understand on posity of time we may not be able to take all the questions today but thank you all for being there and 1:10:21 1 hour, 10 minutes, 21 seconds any further questions please do reach out to us through our company secretary. 1:10:24 1 hour, 10 minutes, 24 seconds We'll be happy to engage and answer your questions. 1:10:30 1 hour, 10 minutes, 30 seconds Thank you sir. On behalf of Anandrati Shares and Stock Brokers that concludes this conference. Thank you for joining us and you may now disconnect your lines. 1:10:40 1 hour, 10 minutes, 40 seconds Thank you all. Thank you so much.