Q1 2027 Emami Ltd Earnings Call

August 4, 2026

Speaker #3: Ladies and gentlemen, good day, and welcome to the Emami Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator 2: Ladies and gentlemen, good day and welcome to Emami Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Percy Panthaki from IIFL. Thank you. Over to you, sir.

Operator: Ladies and gentlemen, good day and welcome to Emami Q1 FY 2027 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Percy Panthaki from IIFL. Thank you. Over to you, sir.

Speaker #3: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.

Speaker #3: I now hand the conference over to Mr. Percy Panthaki from IIFL. Thank you, and over to you, sir.

Percy Panthaki: Hi. Good evening, everyone. I have the pleasure to host the management of Emami Limited for their quarterly conference call. On the line with me, I have Mr. Mohan Goenka, Whole-time Director and Vice Chairman; Mr. Vivek Dhir, CEO, International Business; Mr. Gulraj Bhatia, President, Healthcare; Mr. Manish Gupta, President, Sales; Mr. Dhruv Aggarwal, Chief Growth Officer; and Mr. Rajesh Sharma, President, Finance and IR. I'll hand over the call to Mr. Mohan Goenka for his initial comments. Then we'll open up for Q&A. Over to you, sir.

Speaker #4: Hi. Good evening, everyone. I have the pleasure to host the management of Emami Limited for their quarterly conference call. On the line with me, I have Mr. Mohan Goenka, Full-Time Director and Vice Chairman.

Speaker #4: Mr. Vivek Dhill, CEO, International Business; Mr. Gulraj Bhatia, President, Healthcare; Mr. Manish Gupta, President, Sales; Mr. Dhruv Agarwal, Chief Growth Officer; and Mr. Rajesh Sharma, President, Finance and IR.

Speaker #4: I'll now hand over the call to Mr. Mohan Goenka for his initial comments, and then we'll open it up for Q&A. Over to you, sir.

Speaker #5: Good afternoon, ladies and gentlemen. Thank you for joining us today for Emami Limited's Q1 FY27 earnings call. I'm pleased to report that our consolidated revenue grew by 15% to ₹1,039 crore during the quarter.

Mohan Goenka: Yeah. Good afternoon, ladies and gentlemen. Thank you for joining us today for Emami Limited's Q1 FY27 earnings call. I'm pleased to report that our consolidated revenue grew by 15% to INR 1,039 crores during the quarter. Our domestic business grew by 20%. On a like-to-like basis, growth stood at a healthy 12% with a volume growth of 8% after considering the previous year numbers of two of our startups, Axiom and InkNut. As our business continues to evolve, we are also transitioning our disclosure framework from brand-wise reporting to category-wise reporting. This reflects the increasing scale and diversification of our portfolio. Provides a more holistic view of performance across key consumer segments. Aligns our reporting framework with industry practices. More details on this is available in our presentation.

Speaker #5: Our domestic business grew by 20%, and on a like-to-like basis, growth stood at a healthy 12%, with a volume growth of 8% after considering the previous year numbers of two of our startups, Axiom and Inknut.

Speaker #5: As our business continues to evolve, we are also transitioning our disclosure framework from brand-wise reporting to category-wise reporting. This reflects the increasing scale and diversification of our portfolio, provides a more holistic view of performance across key consumer segments, and aligns our reporting framework with industry practices.

Speaker #5: More details on this are available in our presentation. Coming to our category performance, scalp care emerged as one of our strongest performing categories, delivering 11% growth during the quarter.

Mohan Goenka: Coming to our category performance, hair and scalp care emerged as one of our strongest performing categories, delivering 11% growth during the quarter. Within the portfolio, Navratna Cool Oil posted strong double-digit growth, while Kesh King reported mid-single digit growth. 7 Oils in One, once again delivered robust growth, reinforcing its position as one of the fastest growing brands in our portfolio. Skin care grew by 3% during the quarter. While the summer season was characterized by significant regional divergence, our Talc portfolio delivered high single-digit growth. The male grooming range and BoroPlus registered low single-digit growth, respectively. Healthcare grew by 2% during the quarter. The OTC portfolio continued to perform strongly and grew in high teens, while Medico range posted single-digit growth. The standout performance continued to be our strategic investment portfolio.

Speaker #5: Within the portfolio, Navratna Cool Oil posted strong double-digit growth, while Kesh King reported mid-single-digit growth. Seven Oils in One once again delivered robust growth, reinforcing its position as one of the fastest-growing brands in our portfolio.

Speaker #5: Skincare grew by 3% during the quarter. While the summer season was characterized by significant regional divergence, our talc portfolio delivered high single-digit growth.

Speaker #5: The male grooming range and Boro Plus registered low single-digit growth, respectively. Healthcare grew by 2% during the quarter. The OTC portfolio continued to perform strongly and grew in the high teens, while the Medico range posted single-digit growth.

Speaker #5: The standout performance continued to be our strategic investment portfolio. On a like-to-like basis, this portfolio grew by an impressive 61%, and now contributes 18% of our domestic business.

Mohan Goenka: On a like-to-like basis, this portfolio grew by an impressive 61%, which now contributes 18% of our domestic business, highlighting the increasing relevance of our new age growth engine. The Man Company and Brillare continue to deliver strong momentum, supported by premiumization trends and growing digital adoption. We are equally encouraged by the performance of our recently acquired businesses. Both Axiom Ayurveda and IncNut Digital have started their journey within the Emami ecosystem on a strong footing and are delivering encouraging underlying like-to-like growth. The quarter performance reinforces our belief that Emami today is no longer dependent on a few core categories or brands. We are building a much more diversified portfolio spanning traditional FMCG categories, personal and healthcare, premium beauty and grooming, digital-first brands, and emerging consumer platforms.

Speaker #5: Highlighting the increasing relevance of our new-age growth engine, The Man Company and Brilliar continue to deliver strong momentum, supported by premiumization trends and growing digital adoption.

Speaker #5: We are equally encouraged by the performance of our recently acquired businesses. Both Axiom Ayurveda and Inknut have started their journey within the Emami ecosystem on a strong footing and are delivering encouraging underlying like-to-like growth.

Speaker #5: Taken together, the quarter's performance reinforces our belief that Emami today is no longer dependent on a few core categories or brands. We are building a much more diversified portfolio, spanning traditional FMCG categories—personal and healthcare, premium beauty, and grooming.

Speaker #5: Digital-first brands and emerging consumer platforms: this diversification not only broadens our growth runway, but also enhances the resilience of our business model across varying economic and consumption cycles.

Mohan Goenka: Our channel transformation journey also continues to gather pace. Organized channels grew by 19% on a like-to-like basis, and today contributes to 32% of our domestic business. Modern trade and e-com maintain strong momentum with Quick Com now contributes 35% of our e-com business. International business declined by 12% during the quarter, primarily due to disruptions in the West Asia conflict, which constrained our ability to execute orders. Despite the near-term headwinds, the underlying strength of our international franchise remains intact. We have used this period to strengthen market fundamentals, improve pricing architecture, and enhance operational agility, and remain confident of progressively regaining momentum and delivering healthy growth in the coming quarters.

Speaker #5: Our channel transformation journey also continues to gather pace. Organized channels grew by 19% on a like-to-like basis, and today contribute to 32% of our domestic business.

Speaker #5: Modern trade and e-commerce maintained strong momentum, with quick commerce now contributing 35% of our e-commerce business. International business declined by 12% during the quarter, primarily due to disruptions from the West Asia conflict.

Speaker #5: which constrained our ability to execute orders. Despite the near-term headwinds, the underlying strength of our international franchise remains intact. We have used this period to strengthen market fundamentals, improve pricing architecture, and enhance operational agility, and remain confident of progressively regaining momentum and delivering healthy growth in the coming quarters.

Speaker #5: On profitability, the quarter witnessed inflationary pressures, led by higher crude oil prices and sustained cost increases across packaging material, making it one of the most challenging cost environments for the sector in recent years.

Mohan Goenka: On profitability, the quarter witnessed inflationary pressures led by higher crude oil prices and sustained cost increases across packaging material, making it one of the challenging cost environment for the sector in recent years. These factors, together with the changing business mix following the integration of the acquired businesses, resulting in higher COGS and moderation in gross margin compared to last year. While we undertook measured price increases to mitigate the impact of cost inflation, the sharp rise in input costs during the quarter weighed on profitability. Given the current commodity cost trajectory, we are implementing further pricing actions and expect to more than offset the absolute increase in input costs during the financial year. We continue to focus on productivity enhancements, procurement efficiencies, and value-led revenue management initiatives to strengthen margins and deliver sustained profitable growth.

Speaker #5: These factors, together with the changing business mix following the integration of the acquired businesses, resulted in higher COGS and a moderation in gross margin compared to last year.

Speaker #5: While we undertook measured price increases to mitigate the impact of cost inflation, the sharp rise in input costs during the quarter weighed on profitability.

Speaker #5: Given the current commodity cost trajectory, we are implementing further price actions and expect to more than offset the absolute increase in input costs during the financial year.

Speaker #5: We continue to focus on productivity enhancements, procurement efficiencies, and value-led revenue management initiatives to strengthen margins and deliver sustained profitable growth. However, I am pleased to highlight that despite these cost pressures, ABITA grew by 6% to ₹226 crore, and profit before tax grew by 4% to ₹195 crore.

Mohan Goenka: However, I am pleased to highlight that despite of these cost pressures, EBITDA grew by 6% to INR 226 crore, and profit before tax grew by 4% to INR 195 crore. This reflects the resilience of our business model and the effectiveness of the numerous cost management initiatives undertaken during the quarter. Profit after tax stood at INR 137 crore, lower by 16% due to normalization of our effective tax rate. As part of our ongoing transformation journey, we are executing three strategic initiatives to strengthen our growth platform and improve business efficiency. We are enhancing supply chain planning, inventory management, and distribution visibility, which will help improve forecast accuracy, service levels, and working capital efficiency. SalesCode.ai is being deployed to make our sales organization more productive by enabling better planning, sharper execution, and real-time decision support for the field force.

Speaker #5: This reflects the resilience of our business model and the effectiveness of the numerous cost management initiatives undertaken during the quarter. Profit after tax stood at ₹137 crore, lower by 16% due to normalization of our effective tax rate.

Speaker #5: As part of our ongoing transformation journey, we are executing three strategic initiatives to strengthen our growth platform and improve business efficiency. We are enhancing supply chain planning, inventory management, and distribution visibility, which will help improve forecast accuracy, service levels, and working capital efficiency.

Mohan Goenka: We are enhancing supply chain planning, inventory management, and distribution visibility, which will help improve forecast accuracy, service levels, and working capital efficiency. SalesCode.ai is being deployed to make our sales organization more productive by enabling better planning, sharper execution, and real-time decision support for the field force.

Speaker #5: Sales Code AI is being deployed to make our sales organization more productive by enabling better planning, sharper execution, and real-time decision support for the field force.

Speaker #5: At the same time, our analytical hub is creating a single, enterprise-wide platform for data analytics and AI, enabling faster access to insights and better decision-making across the organization.

Mohan Goenka: At the same time, our analytical hub is creating a single enterprise-wide platform for data analytics and AI, enabling faster access to insights and better decision-making across the organizations. These initiatives are progressing very well and are expected to be completed during the current financial year. As we look ahead, we remain very optimistic about the growth prospects for the business. We are encouraged by the strong performance of our core brands, rapid scaling of our digital-first brands, and sustained traction in modern trade, eCom, and QuickCom channels. With commodity inflation and geopolitical developments remains areas to watch, we believe our diversified portfolio, strengthened distribution capabilities, robust innovation pipeline, and disciplined cost management initiatives positions us well to deliver sustained and profitable growth through the remainder of FY27. With that, I would now like to open the floor for questions. Thank you.

Speaker #5: These initiatives are progressing very well and are expected to be completed during the current financial year. As we look ahead, we remain very optimistic about the growth prospects for the business.

Speaker #5: We are encouraged by the strong performance of our core brands, the rapid scaling of our digital-first brands, and the sustained traction in modern trade, e-commerce, and quick commerce channels.

Mohan Goenka: We are encouraged by the strong performance of our core brands, rapid scaling of our digital-first brands, and sustained traction in modern trade, eCom, and QuickCom channels. With commodity inflation and geopolitical developments remains areas to watch, we believe our diversified portfolio, strengthened distribution capabilities, robust innovation pipeline, and disciplined cost management initiatives positions us well to deliver sustained and profitable growth through the remainder of FY27. With that, I would now like to open the floor for questions. Thank you.

Speaker #5: With commodity inflation and geopolitical developments remaining areas to watch, we believe our diversified portfolio, strengthened distribution capabilities, robust innovation pipeline, and disciplined cost management initiatives position us well to deliver sustained and profitable growth through the remainder of FY27.

Speaker #5: With that, I would now like to open the floor for questions. Thank you.

Speaker #1: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Abneesh Roy from Nomura. Please go ahead.

Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Abneesh Roy from Nomura. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Abhinesh Roy from Nomura.

Speaker #1: Please go ahead.

Speaker #5: Yeah, thank you. My first question is on strategic investment. So, 61% growth is strong. If you could tell us, in the four sub-segments, which one is driving this growth?

Abneesh Roy: Yeah. Thank you. My first question is on strategic investment. 61% growth is strong. If you could tell us in the four sub-segment, which one is driving this growth? Some of these are quite new. For example, Axiom became a subsidiary in Q1 only, and InkNut again from Q1 only. Some of these are quite new. I understand 61% like-to-like is comparing from the base. But still, if you can explain this strong growth, how sustainable is it? Where is it coming from? Company, of course, last two, three years has been reasonably challenging. So is it a base effect?

Speaker #5: Some of these are quite new. For example, Axiom became a subsidiary in Q1 only, and Incat, again, from Q1 only. So some of these are quite new.

Speaker #5: I understand 61% like-to-like is comparing in from the base. But still, if you can explain this strong growth, how sustainable is it? Where is it coming from?

Speaker #5: And company, of course, the last two, three years have been reasonably challenging. So, is it a base effect?

Speaker #2: Yeah. So at least Dove is driving this business, and I would request Dhruv to take this.

Mohan Goenka: Yeah. Abneesh Roy, Dhruv is driving this business and I would require Dhruv to take this.

Speaker #4: Sure. So I think, across all four of the subsidiaries that are represented here, we have grown substantially, both in terms of volume and value.

Dhruv Aggarwal: Sure. I think, across all four of the subsidiaries that are represented over here, we've grown substantially, both in terms of volume and value. When it comes to Axiom, while it is a new subsidiary, it's the new majority stake that we have. We've been involved since 2023. Since last year we've been working on some of the initiatives that have started to reap the rewards. Overall, yes, it's been very good, 60%. Even P&C, which was struggling, like you said, over the last two years, that's grown well north of 20%. It's actually across all. The only one I think that is slightly newer is InkNut in the portfolio, we're getting our hands dirty with that brand very quickly.

Speaker #4: When you, when it comes to Axiom, while it is a new subsidiary—it's a new majority stake that we have—we've been involved since 2023.

Speaker #4: So we've got, you know, very—since last year, we've been working on some of the initiatives that have started to reap the rewards.

Speaker #4: So overall, yes, it's been, you know, it's been very good—60%. But, you know, even TNC, which was struggling, like you said, over the last two years, that's grown north of 20%.

Speaker #4: You know, well north of 20%. So, you know, it's actually across all. The only one, I think, that is slightly newer is Incnat in the portfolio, but, you know, we're getting our hands dirty with that brand very, very quickly.

Speaker #2: But how sustainable is this? Sixty-one percent—is there anything one-off, any pipeline buildup due to new launches? For the balance three quarters, what are the expectations on growth?

Abneesh Roy: How sustainable is this 61%? Is there anything one-off, any pipeline buildup due to new launches? For the balance three quarters, what is the expectation on growth?

Speaker #4: I think you'll see something similar, so this is quite sustainable.

Dhruv Aggarwal: I think you'll see something similar. This is quite sustainable.

Speaker #2: Understood. Last question, on this new framework for reporting—category-led reporting—I wanted to understand the thought process of doing this now, because in one or two segments, frankly, it looks good to do category reporting, but what do I do with skincare, for example, which has got talcum powder, which is very seasonal? You have clubbed that with 'Smart and Handsome' and BoroPlus, which is a very different segment.

Abneesh Roy: Understood. Last question, on this new framework for reporting, category-led reporting. I wanted to understand thought process of doing this now, because in one or two segment, frankly, it looks good to do category reporting, but what do I do with skincare, for example, which has got talcum powder, which is very seasonal. You have clubbed that with Smart And Handsome and BoroPlus, which is very different segment. How does this help in terms of data point, if you could tell? I think same issue will be also in healthcare. Pain management again is quite seasonal, and then you have clubbed that with Zandu Healthcare, which is far more, I think, strategic in nature, far more evenly balanced out every quarter. If you could tell us how does this help? I understand category reporting a lot of other companies are doing, how does this help?

Speaker #2: So how does this help in terms of data points? If you could tell, I think the same issue will also be there in healthcare. Pain management, again, is quite seasonal, and then you have clubbed that with Jundu Healthcare, which is far more, I think, strategic in nature, far more evenly balanced out every quarter.

Abneesh Roy: Pain management again is quite seasonal, and then you have clubbed that with Zandu Healthcare, which is far more, I think, strategic in nature, far more evenly balanced out every quarter. If you could tell us how does this help? I understand category reporting a lot of other companies are doing, how does this help?

Speaker #2: So, if you could tell us, how does this help? I understand category reporting—a lot of other companies are doing it—but how does this help?

Speaker #2: No, Abhineesh, someday we had to start this because, with so many brands coming in, you know, it was not possible for us to give brand-wise information, okay?

Mohan Goenka: No, Abneesh, someday we had to start this because, with so many brands coming in, it was not possible for us to give brand-wise information. Okay. Clubbings can be different for each company, but Balm being a Zandu brand and Balm being a healthcare, the brand name is also Zandu, so we wanted to club it with the healthcare only. It is primarily a healthcare, and it is not so seasonal. Sometimes people really get confused with seasonal, non-seasonal, and with now almost 10, 12 brands, we have to club. We can't give each brand reporting.

Speaker #2: Clubbings can be different for each company, but BAM being a Jundu brand, and BAM being in healthcare, you know, the brand name is also Jundu.

Speaker #2: So we wanted to club it with, the healthcare only. It is primarily a healthcare, and it is not, so seasonal. So, you know, sometimes people really get confused with seasonal, non-seasonal, you know, and with, now, almost, 10, 12 brands, you know, we have to club.

Speaker #2: We can't give reporting for each brand.

Speaker #5: Understood. Sure. Coming from me. Thank you.

Abneesh Roy: Understood.

Mohan Goenka: Yeah.

Abneesh Roy: That's all from me. Thank you.

Speaker #2: Yeah.

Mohan Goenka: Yeah.

Speaker #1: Thank you.

Operator 2: Thank you.

Operator: Thank you.

Speaker #2: And there are more brands in the pipeline we are looking for. So, how do we keep on reporting brand-wise information?

Mohan Goenka: There are more brands in the pipeline we are looking for. How do we keep on reporting brand-wise information?

Speaker #5: Understood.

Abneesh Roy: Understood.

Speaker #2: Yeah.

Mohan Goenka: Yeah.

Speaker #5: Yeah.

Abneesh Roy: Yeah.

Speaker #1: Thank you. The next question comes from the line of Arnab Mitra from Goldman Sachs. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Arnab Mitra from Goldman Sachs. Please go ahead.

Operator: Thank you. The next question comes from the line of Arnab Mitra from Goldman Sachs. Please go ahead.

Speaker #2: Yeah, hi Mohanji. My first question is on margins. So, the impact that you have seen this quarter, how much of it is due to input costs, and how much would you say is structural, because your portfolio is changing towards these new categories?

Arnab Mitra: Yeah, hi. Mohan, my first question is on margins. The impact that you have seen this quarter, how much of it is to do with the input cost, and how much of it you would say is structural because your portfolio is changing towards these new categories? The impact which is from commodities, given your pricing power, do you expect to offset it completely over a period of a couple of quarters, or do you think the pressure is so much that there is going to be an impact for the remaining three quarters also of the year?

Speaker #2: And the impact, which is from commodities, given your pricing power, do you expect to offset it completely over a period of a couple of quarters, or do you think the pressure is so much that there is going to be an impact for the remaining three quarters of the year as well?

Speaker #5: Yeah. So Arnab, our input cost, if you see, has gone up by 360 basis points, okay? And out of this, almost 200 basis points is due to the conflict—the West Asia conflict—and the balance 160 is because of the mix.

Mohan Goenka: Yeah. Arnab, our input cost, if you would see, has gone up by 360 basis points, okay? Out of which almost 200 basis points is due to the West Asia conflict, and the balance 160 is because of the mix. Now that the pressure is also easing a bit, we are very confident on that front that we will be able to offset with increased prices. As far as the mix is concerned, see, that would be difficult because the startups have lower margins. We are trying our best to also see that how can we increase some pricing to offset that increase also. I am not worried for the whole year, Arnab, very honestly. I think the next three quarters should be relatively better than this.

Speaker #5: So now that the pressure is also easing a bit, we are very confident on that front that we will be able to offset with increased prices.

Speaker #5: As far as the mix is concerned, see, that would be difficult because the startups have lower margins. But we are trying our best to also see how we can, you know, increase some pricing to offset that increase also.

Speaker #5: I'm not worried for the whole year, Arnab, very honestly. I think the next three quarters should be relatively better than this.

Speaker #2: Mm-hmm. Got it. Mohanji, my second question is on talcum powder, where I think last year, full year FY26, there was a large decline over the base year.

Arnab Mitra: Got it. Mohan, my second question on talcum powder, where I think last year, full year FY26, there was a large decline over the base year. Now, in this category, now that, let's say, this year is a normal year with a good summer, should we not expect the revenue to go back to the FY25 level in talcum powder? Do you think fundamentally the revenue there, the growth or the recovery is not going to be a full recovery in terms of at least getting back to the older levels of revenue? Because that is what seems to have driven the slowdown in the skincare business this time.

Speaker #2: Now, in this category, now that, let's say, this year is a normal year with a good summer, should we not extend the revenue to go back to the FY25 level in telecom powder, or do you think fundamentally the revenue there is not going to, the growth or the recovery is not going to be a full recovery?

Speaker #2: in terms of at least getting back to the older levels of revenue, because that is what seems to have driven the slowdown in the skincare business this time.

Speaker #5: Absolutely, Arnab, you are absolutely right. So we will be able to recover, you know, and go back to the 25 numbers. Last year was a low number, but this year we are going to make up.

Mohan Goenka: Absolutely, Arnab. You're absolutely right. We would be able to recover and go back to the FY25 numbers. Last year was a low number, but this year we are going to make up. You will see substantially high numbers in this quarter for talc.

Speaker #5: Or you will see a substantially high numbers in this quarter for telc. And the whole year for the whole year, you will, see a significantly high numbers.

Arnab Mitra: Got it.

Mohan Goenka: For the whole year, you will see significantly high numbers.

Speaker #2: Mm-hmm. Got it, got it. And my last question was on international business. There has still been a decline. Now, in most other companies, what we have seen is most companies have now figured out a way to operate, you know, those companies who had a Middle East base.

Arnab Mitra: Got it. My last question was on international business, where there has still been a decline. In most other companies, what we have seen is most companies have now figured out a way to operate, those companies who had a Middle East base. Have you also been able to figure out other logistics, so that your international business can recover? Or do you still think till the Hormuz is closed, there is going to be a decline in the foreseeable future?

Speaker #2: So have you also been able to figure out other logistics so that your mid international business can recover? Or do you still think until the Hormuz is closed, there is going to be a decline?

Speaker #2: till in the foreseeable future?

Speaker #5: Vivek, would you like to answer?

Mohan Goenka: Vivek, would you want to answer?

Speaker #2: Yeah.

Vivek Dhir: Yeah. Our portfolio is slightly different from rest of the companies, which are essentially into only personal care. We are into OTC space, pain management as well in Middle East. The pain management is all produced out of India only. Personal care is produced in UAE as well as Germany, and a part of that is being produced in Thailand. Over there, we are not having much of the issue. That is being fully resurrected. The OTC, pain management space, we are still struggling because certain pain management space, other things, have still not been able to move out of India till date. We are having hefty orders with us not able to move.

Speaker #5: so, so our portfolio slightly different from, rest of the companies. which are essentially into only personal care. We are into OTC space, pain management, as well in Middle East.

Speaker #5: So the pain management is all produced out of India only. So personal care is produced in the UAE as well as Germany, and a part of that is being produced in Thailand over there.

Speaker #5: We are not having much of the issue, so that is being fully resurrected. But in the OTC pain management space, we are still struggling because certain pain management areas and other things have still not been able to move out of India.

Speaker #5: Till date, we have the orders with us but are not able to move. We are trying to find solutions to get some approvals from the ministries.

Vivek Dhir: We are trying to find solutions to get some approvals from the ministries, and hopefully in few days we should be able to get something moved from India in that regard. When that is sorted, then we should be fully sorted in terms of supply reinstatement to the markets. That is where we are struggling today. Rest of the personal care side, we are fairly, I think, balanced now.

Speaker #5: And hopefully in a few days, we should be able to get something moved from India. In that regard, if and when that is sorted, then we should be fully sorted.

Speaker #5: In terms of supply, reinstatement to the markets—that is where we are struggling today. But for the rest of the personal care side, I think we are fairly balanced.

Speaker #5: Now.

Speaker #2: Got it. Understood. That's it from my side. All the best.

Arnab Mitra: Got it. Understood. That's it from my side. Over.

Speaker #5: And Arnab, on the international front, I think the decline this is, now done. Most likely, you will see a significant growth coming in from the third and the fourth quarter because we have, we have, got we have realigned our, a lot of international business, strategies have been realigned in the last one, two quarters when all these disruptions were happening.

Mohan Goenka: Arnab, on the international front.

Arnab Mitra: Yes

Mohan Goenka: I think the decline, this is now done. Most likely you will see a significant growth coming in from Q3 and Q4. A lot of international business strategies have been realigned in the last one, two quarters when all these disruptions were happening. I think you will see much better numbers in Q3 and Q4.

Speaker #5: So I think, you know, you will see much better numbers in the third and fourth quarters.

Speaker #2: Got it. Got it. Right. That's very helpful. Thanks.

Arnab Mitra: Got it.

Vivek Dhir: Right.

Arnab Mitra: That's very helpful. Thanks.

Speaker #1: Thank you. The next question comes from the line of Harjit Kapoor from Investec. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Harit Kapoor from Investec. Please go ahead.

Operator: Thank you. The next question comes from the line of Harit Kapoor from Investec. Please go ahead.

Speaker #2: Yeah, good evening. Just, the first question is on the strategic investments portfolio. So, I just wanted to get a sense of whether there is any seasonality in this part of the portfolio across the four brands that we have.

Harit Kapoor: Yeah. Good evening. The first question is on strategic investments portfolio. Just wanted to get a sense of whether there is any seasonality in this part of the portfolio across the four brands that we have. Just wanted to understand whether this INR 160 odd crores can be broadly annualized to look at a yearly number. That's my first question.

Speaker #2: Just wanted to understand whether this 160-odd crores can be broadly annualized to look at a yearly number. So that's my first question.

Speaker #5: Yeah, yeah. By and large, yeah. Dhruv, you can take the question. Yeah.

Mohan Goenka: Yeah. Dhruv, you can take that one. Yeah.

Speaker #2: So, I think Axiom has some built-in seasonality because it's juices and summer is a better season for us. But, you know, in terms of annualizing the figure, I think, you know, because of the internet, I think only one month's value will be reported in these numbers.

Dhruv Aggarwal: I think Axiom has some level of seasonality because it's juices and summer is a better season for us. In terms of annualizing the figure, I think because it's not, I think only 1 month's value will be reported in these numbers. Generally, if you annualize it, you should be fairly accurate in terms of what they're aiming for. Got it.

Speaker #2: You know, generally, if you analyze it, you should be, you know, fairly accurate in terms of what we're aiming for. Got it.

Harit Kapoor: Got it.

Speaker #5: There's not much seasonality, Harjit, other than just the Axiom juice business, which out of the total portfolio should not be more than 7-8%.

Harit Kapoor: There's not much seasonality, Harit, other than just the Axiom Juice business, which out of the total portfolio should not be more than 7% and 8%, which is pure seasonality. If I'm not wrong, Rohit?

Mohan Goenka: There's not much seasonality, Harit, other than just the Axiom Juice business, which out of the total portfolio should not be more than 7% and 8%, which is pure seasonality. If I'm not wrong, Rohit?

Speaker #5: If you see pure seasonality—if I'm not wrong, Dhruv?

Speaker #2: No, absolutely. I think the next two quarters actually are high season for TNC and Relay because, you know, that's festive, and that's when we do a lot of our sales, given these are B2C brands.

Dhruv Aggarwal: No, absolutely. I think the next 2 quarters actually are high season for TMC and Brillare because that's festive, and that's where we do a lot of our sales, given these are D2C brands. We've got that path ahead of us over the next 2 quarters.

Speaker #2: So we've got a fast ahead of us over the next two quarters.

Speaker #5: Yeah.

Harit Kapoor: Yeah. Got it.

Speaker #2: got it. Got it. And, and the second, bit was, you know, given that, you know, there's been, a consolidation as well as acquisition, in the last, few months, do we, do we expect that, you know, so, so will, will 27 be a year of, you know, where we kind of consolidate these four acquisitions, see them grow, or build them out, and then maybe look for incremental opportunities?

Dhruv Aggarwal: Got it.

Harit Kapoor: The second bit was, given that there's been consolidation as well as acquisition in the last few months, do we expect that 2027 will be a year of where we kind of consolidate these four acquisitions, see them grow or build them out, then maybe look for incremental opportunities? Or that's something ongoing and one can even see more such initiatives even in the near to medium term.

Speaker #2: Or, or that's something ongoing in one, you know, one can even see more, more such, initiatives even in the near to medium term?

Speaker #5: I think we are doing this in parallel. We think we have built a repeatable model at the center, where we are able to help each of these companies grow, right?

Dhruv Aggarwal: I think we are doing this in parallel. We think we've built a repeatable model at the center, where we are able to help each of these companies grow. I think across all of our brands, there is not one that hasn't grown. We're quite happy with the repeatable model. Of course, new capabilities constantly need to be added. If we can get two or three more engines inside these two or three more acquisitions, then why not? We are looking very aggressively in parallel to see who else we can roll up here.

Speaker #5: And I think across all of our brands, there is not one that hasn't grown, right? So, we're quite happy with the repeatable model. Of course, we have capabilities that constantly need to be added.

Speaker #5: And so if we can get two or three more engines inside, two or three more acquisitions, then why not? So we are looking very aggressively, in parallel, to see who else we can roll up here.

Speaker #2: Got it. And the last bit again was on the strategic investments. You did mention the gross margin impact because of NICS, but I just wanted to get a range of these four brands now at an aggregate level.

Harit Kapoor: Got it. Last bit again is on these strategic investments. You did mention the gross margin impact because of mix. Just wanted to get a range of these four brands now at an aggregate level. What are the kind of EBITDA margin levels for this business at an overall level? Are you at breakeven levels? Are you below breakeven? Is it low single, mid-single? Just some color on. I think some of them are at the lower end, some of them are actually quite profitable. At an aggregate level, how does that look like?

Speaker #2: You know, what are the kind of, you know, EBITDA margin levels for this business at a Negro level? Are you at break-even levels?

Speaker #2: Are you below break-even? You know, is it, a low s no, low single, mid-single? just some color on, on because I think some some of them are, are, are, are at the lower end.

Speaker #2: Some of them are actually quite profitable. So I think at the aggregate level, how does that look?

Speaker #5: Obviously, yeah, it's a mix because, you know, each of these brands are at different stages of growth. And of course, I'd like to think that all of them are ready for, you know, strong growth.

Dhruv Aggarwal: We are at the mix because each of these brands are at different stages of growth. Of course, I'd like to think that all of them are ready for strong growth. At an aggregate level, I think they're about EBITDA neutral, breakeven.

Speaker #5: At an aggregate level, I think they're about EBITDA neutral, break-even.

Speaker #2: Got it. Those are my questions. I'll come back to those. Thank you. Thank you.

Harit Kapoor: Got it. Those are my questions. I will come back if I have more. Thank you.

Speaker #1: Thank you. The next question comes from the line of Loybo Gupta from Bowhead Investment. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Vaibhav Gupta from Bowhead Investment. Please go ahead.

Operator: Thank you. The next question comes from the line of Vaibhav Gupta from Bowhead Investment. Please go ahead.

Speaker #5: Hi, sir. Thanks for taking my question. I wanted to understand, what is the high other income figure in the standalone number? So, it is ₹53 crore.

Vaibhav Gupta: Hi, sir. Thanks for taking my question. Wanted to understand, what is the high other income figure in standalone numbers. It is INR 53 crores.

Speaker #2: Yeah. Hi, Raghav. FIT includes dividend from one of our international subsidiaries, amounting to roughly ₹32 crore, which gets knocked off in consolidation.

Dhruv Aggarwal: Yeah, hi, Vaibhav. It includes a dividend from one of our international subsidiaries, amounting to roughly INR 32 crores, which gets knocked off in consolidation.

Rajesh Sharma: Yeah, hi, Vaibhav. It includes a dividend from one of our international subsidiaries, amounting to roughly INR 32 crores, which gets knocked off in consolidation.

Speaker #5: Understood, understood. And my next question is, so sir, we had revamped our Cash King portfolio and it was seeing good growth in the next two of last year.

Vaibhav Gupta: Understood. My next question is, sir, we had revamped our Kesh King portfolio, and it was seeing good growth in H2 of last year, but the growth has slowed down in this quarter. Could you share what has been happening there?

Speaker #5: But the growth has slowed down in this quarter. So, could you share what has been happening there? Growth has been mid to high single-digit, Raghav.

Dhruv Aggarwal: Growth has been mid-high single-digit growth, Vaibhav. It will be like some quarters because maybe of some base effect and all, but we are expecting a double-digit growth at the end of the year for Kesh King portfolio. Nothing to worry.

Mohan Goenka: Growth has been mid-high single-digit growth, Vaibhav. It will be like some quarters because maybe of some base effect and all, but we are expecting a double-digit growth at the end of the year for Kesh King portfolio. Nothing to worry.

Speaker #5: So, it will be like, you know, some quarters may see an impact because of the base effect and all. But we are expecting double-digit growth at the end of the year for the Cash King portfolio.

Speaker #5: There's nothing to worry about. Understood. And sir, how was the growth in Breliar? Really interesting brands there. If you could call out the growth rates in that?

Vaibhav Gupta: Understood. Sir, how was the growth in Brillare really interesting brand, so wanted to see if you could call out the growth rates in that.

Dhruv Aggarwal: I think individual growth rates, we're not calling out, but Brillare had a fabulous year. I think the rosemary oil shorts are really paying dividends for us, and consumers are very happy with that product. That's where I think we had well above the average growth.

Speaker #2: I think individual growth rates we're not calling out, but Brelia had a fabulous year. I think the Rosemary Oil shots are really paying dividends for us, and consumers are very happy with that product.

Speaker #2: You know, so that's where I think we had well above average growth.

Speaker #5: Understood. Thank you so much. For the whole year, for all these startups—for this quarter, we did ₹160 crore. By the end of the year, I think we will be ending up anywhere between ₹750 to ₹800 crore.

Vaibhav Gupta: Understood. Thank you so much.

Mohan Goenka: For the whole year, for all these startups, like for this quarter, we did INR 160 crore. By the end of the year, I think we will be ending up anywhere between INR 750 to 800 crore.

Speaker #2: That-that's great, sir.

Vaibhav Gupta: That's great, sir. Thank you.

Speaker #5: Thank you.

Speaker #1: Thank you. The next question comes from the line of Percy Panthaki from IISL. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Percy Panthaki from IIFL. Please go ahead.

Operator: Thank you. The next question comes from the line of Percy Panthaki from IIFL. Please go ahead.

Speaker #5: Yeah. I'm audible?

Percy Panthaki: Yeah, I'm audible?

Speaker #1: Yes.

Operator 2: Yes.

Operator: Yes.

Speaker #2: Yeah. So, just wanted to,

Percy Panthaki: Yeah. Just wanted to understand on the D2C businesses, how are you running them right now? Are they running as four separate companies altogether, and that will continue in future? You are planning to sort of have some kind of synergies or some kind of bundling of some of the functions? How will the organization structure of this sort of strategic investments division look like, let's say, a year from now?

Speaker #5: understand on the D2C businesses, how are you running them right now? Are they running as, four separate companies, altogether? And, that will continue in future?

Speaker #5: Or, are you planning to sort of have some kind of synergies, or some kind of bundling of some of the functions?

Speaker #5: So, and also, how will the organizational structure of this, sort of, strategic investments division look like? Let's say a year from now. Yeah. So, right now they are being run independently, with their own CEOs.

Dhruv Aggarwal: Yeah. Right now they are being run independently with their own CEOs. I think we have a growth office that's about seven, eight members. That is the link between Emami and these startups, and the family is very closely involved in making sure that these startups are growing. We provide all the support that we need, whether it is content or international business or strategy or relationships with e-commerce or GT at the MT channel. I think that goes through me and my office. Wherever we are able to help independently, we do that. Plus within these companies, there's a lot of knowledge sharing and experience sharing. That has also really helped in accelerating the pace of growth. Right. I think year from now also we expect to maintain a similar sort of structure.

Speaker #5: I think the other growth office, that's about seven or eight members, is the link between Emami and these startups. And the family is very closely involved in making sure that these startups are growing.

Speaker #5: We provide all the support that we need, whether it is content or international business, or strategy, or relationships with e-commerce, or, you know, GT and the MT channel.

Speaker #5: So, I think that goes through me and my office, and so wherever we are able to help independently, we do that.

Speaker #5: Plus, within these companies, there's a lot of knowledge sharing and experience sharing, so that has also really helped in accelerating the pace of growth.

Speaker #5: Right? I think a year from now also, we expect to maintain a similar sort of structure. We might bolster the central team and see what capabilities we can offer, because now it's more of a plug-and-play into.

Dhruv Aggarwal: We might bolster the central team and see what capabilities we can offer, because now it's more of a plug-and-play into our repeatable model, as I mentioned earlier. I think for the near term, at least next 1 year, we'll keep it in this way.

Speaker #5: you know, our, our repeatable model as I had mentioned earlier. So, but, but I think we like the for the near term, at least next one year, we'll, we'll keep it in this way.

Speaker #2: And what is the margin structure for the business as well? Yeah.

Percy Panthaki: What is the margin structure for the business as a whole?

Mohan Goenka: Percy.

Percy Panthaki: Yeah

Speaker #5: By and large, as far as we are concerned, Dhruv has almost a free hand to run the business. He runs this business out of Gurgaon, and the entire team is based out of Gurgaon.

Mohan Goenka: By and large, as far as we are concerned, Dhruv has almost a free hand to run the business. He runs this business out of Gurgaon, and the entire team is based out of Gurgaon. Because this needs a different strategy and people.

Speaker #5: So, because this needs a different, you know, strategy and, you know, people, so, you know, we have very aggressive plans, as we said, going forward for strategic investments.

Percy Panthaki: Sure

Mohan Goenka: We have very aggressive plans, as we said, going forward for strategic investments. We are looking for more such acquisitions. I think the team is by and large built under Dhruv's this thing, and as he said, all of these companies have very senior talent who are the CEOs for each individual businesses. The business, once we end this year by INR 700, 800 crore, growing at almost 20% or 30% year-on-year. It needs a different strategy and pace. Management is completely committed to invest behind these fast-growing segments.

Speaker #5: And we are looking for more such acquisitions. So I think the team is, by and large, built under Dhruv's leadership. And as he said, all of these companies have very senior talent.

Speaker #5: Who are the CEOs for each individual business? So, and, the business—once we end this year by Rs 700–800 crore, you know, growing at almost 20 or 30 percent year on year.

Speaker #5: So, you know, it needs a different strategy and pace. And management is completely committed to invest behind these fast-growing segments.

Speaker #2: Understood. also, you know, Raghav.

Percy Panthaki: Understood. Also, can you help.

Speaker #5: And then when we need people, you know, he's, free to appoint them. Yeah. Sure. Dhruv, can you help us understand, what is I mean, not asking separately for the four different, companies, but for strategic investments as a whole, what is the kind of, margin structure that you have?

Mohan Goenka: When we need people, he's free to appoint them.

Percy Panthaki: Yeah, sure. Dhruv, can you help us understand what is, I mean, not asking separately for the four different companies, but for strategic investments as a whole, what is the kind of margin structure that you have? What is at a gross margin as well as an EBITDA margin level?

Speaker #5: What is it like at a gross margin as well as at an EBITDA margin level?

Speaker #2: See, from a gross margin perspective, you know, companies like TNC are north of 60%. Companies like Breliar and Eknat are north of 70%. From an EBITDA perspective, I think I'll only be able to comment on the aggregate, where, you know, we are close to or at EBITDA neutral.

Dhruv Aggarwal: From a gross margin perspective, companies like TMC are north of 60%, companies like Brillare and InkNut are north of 70%. From an EBITDA perspective, I think I'll only be able to comment on the aggregate, where we are close to or at EBITDA neutral. Going forward, I will take some calls regarding where I see a good opportunity to grow and where I see a good opportunity to make a profit. I think net-net, there is a long-term target, two, three-year target, where we will get to a good, healthy amount of profitability. If there is momentum right now, then we don't want to give up on that. Any growth in our top line at startups that are between INR 100 to 300 crores will only offset our fixed costs and help us in the long term.

Speaker #2: But, you know, going forward, I will take some calls regarding, you know, where I see a good opportunity to grow, and where I see a good opportunity to make profit.

Speaker #2: I think, net-net, there is a long-term target, you know, a two to three-year target where we will get to a good, a healthy amount of profitability.

Speaker #2: But if there is momentum right now, then we don't want to give up on that, because, you know, any growth in our top line at startups that are between ₹100 to ₹300 crore will only offset our fixed costs and help us in the long term.

Speaker #5: Sure, sure. So how long are you thinking? Nowhere—sorry, 30% coming in here. See, none of our four startups have gross margin below 55%.

Percy Panthaki: Sure. How long are you planning.

Mohan Goenka: Sorry, Gurjeet, I'm coming in here. See, none of our four startups have gross margin below 55. Axiom may be slightly lower, but others are much above. Yeah, more than 50%.

Speaker #5: Axiom may be slightly lower, but others are much above—yeah, more than 50%. Yeah.

Mohan Goenka: Yeah.

Percy Panthaki: Yeah.

Speaker #2: Right.

Percy Panthaki: Right.

Mohan Goenka: Right. Dhruv, am I correct?

Speaker #5: Dhruv? Am I correct?

Mohan Goenka: Dhruv, am I correct?

Dhruv Aggarwal: Yes, absolutely. When it comes to D2C, the criteria for investing itself is high gross margin, we are looking at low performance marketing spend, more brand marketing spend. We reoriented our entire brand investment towards content, media, less offers and so on. I think it's all building for the long term.

Speaker #2: Yes, absolutely. I mean, when it comes to DTC, we are looking at others. I mean, the criteria for investing itself is high gross margin.

Speaker #2: And we are looking at, you know, lower performance marketing spend, more brand marketing spend. We oriented our entire brand investments towards, you know, content, media, less offers, and so on.

Speaker #2: So, I think it's all building for the long term.

Speaker #5: So, how long do you think it would take for the overall vertical strategic investments, overall, to sort of go to, let's say, a low-teens kind of EBITDA margin?

Percy Panthaki: How long do you think it would take for the overall vertical strategic investments overall to sort of go to, let's say, low teens kind of EBITDA margin? Would it be a two to three-year perspective, or would it be more like a five-year kind of horizon?

Speaker #5: Would it be, like, a two- to three-year perspective, or would it be more like a five-year kind of horizon?

Speaker #2: So, you know, this is growing so quickly that it's hard for me to pinpoint. But I think, you know, you would expect high single digits probably at the three-year point.

Dhruv Aggarwal: This is growing so quickly that it's hard for me to pinpoint. I think you would expect high single digits probably at the three-year point, then we'll take it from there.

Speaker #2: And then we'll take it from there.

Speaker #5: Understood. And lastly, could you give me the channel split, in terms of—I'm assuming that there is no brick-and-mortar, or, if at all, let me know about that as well.

Percy Panthaki: Understood. Lastly, could you give me the channel split in terms of, I'm assuming that there is no brick and mortar, or if at all, let me know about that as well. Within the online portion, what is the split between your own website or app or whatever versus third-party websites or apps?

Speaker #5: But within the online portion, what is the split between your own website or app, or whatever, and third-party websites or apps?

Speaker #2: Yeah, see, in aggregate it would be very different because, you know, for a company like Eknat, which does personalized healthcare, they're then largely on my website.

Dhruv Aggarwal: Yeah. See, in aggregate, it would be very different because for a company like InkNut, which does personalized hair care, they're largely on my website. For a company like Brillare or TMC, I'm going to the channel where my consumers are going. That's quick commerce, e-commerce. While we use our website for first-party data, and there's a ton of creative things that we can do with that. Axiom actually has a phenomenal offline network. Most of our sales there are offline across states from north to south. We sell in Jammu, we sell in Tamil Nadu, we sell everywhere through an offline network. There, actually the job is to build more online presence, more quick commerce presence.

Speaker #2: For a company like Breliar or TNC, I'm going to the channel where my consumers are going. So that's quick commerce, e-commerce. While we use, you know, websites for first-party data, and there's a ton of creative things that we can do with that.

Speaker #2: Actually, Emami has a phenomenal offline network. So most of our sales are offline, across states from north to south. We sell in Jammu.

Speaker #2: We sell in Tamil Nadu. We sell everywhere, through an offline network. So actually, the job is to build more online presence, more quick commerce presence.

Speaker #5: So, at an overall level, for the entire vertical, roughly, what would be your split between owned assets, third-party digital assets, and offline?

Percy Panthaki: At an overall level, for the entire vertical, roughly what would be a split between own assets, third-party digital assets, and offline?

Dhruv Aggarwal: At an overall level, I would think you can put maybe 20% offline.

Speaker #2: At an overall level, I would think you can put maybe 20% offline. I think 20% own assets. And then the remaining will be—sorry, probably 25 to 30% own assets.

Dhruv Aggarwal: I think probably 25% to 30% own assets, and then the remaining will be e-com, quick com, and other platforms.

Speaker #2: And then the remaining will be e-com, quick commerce, and other platforms.

Speaker #5: Okay, got it. Got it. Yeah, I think my questions are answered. We don't have anyone in the queue right now, but if anyone wants to ask a question, they can press star one and we'll take it.

Percy Panthaki: Okay, got it. Yeah, I think my questions are answered. We don't have anyone in the queue right now, but if anyone wants to ask a question, they can press star one and we'll take it, or else we can close the call. Yeah, there is one. Asaro, you can go ahead.

Speaker #5: Or else, we can close the call. Yeah, there is one. Asarva, you can go ahead.

Speaker #3: Thank you. The next question comes from the line of Kosta Bhubna, from BMSPL Capital. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Kaustav Bugna from DMSPL Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Kaustav Bugna from DMSPL Capital. Please go ahead.

Speaker #4: Yeah. So please explain to me this a little bit more—the margin trajectory. Given that the new brands, as in the startups, the investments that we're in, are lower margin.

Kaustav Bugna: Yeah. Please explain to me this, a little bit more about the margin trajectory, given that the new brands, as in the startups, the investments that we're in, is lower margin. As of now, that's where the main growth is coming from. That's low margin growth. Just explain to me, X of these low margin businesses which are growing, what about the businesses which command margin? What's the outlook over there? Because if we want to grow our operating profits along with our revenues, those businesses would have to bounce back and grow, right? If they are higher margin. Could you just explain that whole part?

Kaustav Bubna: Yeah. Please explain to me this, a little bit more about the margin trajectory, given that the new brands, as in the startups, the investments that we're in, is lower margin. As of now, that's where the main growth is coming from. That's low margin growth. Just explain to me, X of these low margin businesses which are growing, what about the businesses which command margin? What's the outlook over there? Because if we want to grow our operating profits along with our revenues, those businesses would have to bounce back and grow, right? If they are higher margin. Could you just explain that whole part?

Speaker #4: So and that's as of now, that's where the main growth is coming from. So that's low margin growth. just explain to me, X of these, low margin businesses which are growing, what about the businesses which command margin?

Speaker #4: What's the outlook over there? Because if we want to grow our operating profits along with our revenues, those businesses would have to bounce back and grow, right, if they're higher margin?

Speaker #4: So, could you just explain that whole part?

Speaker #5: Yeah. So, as I said, for the year, I don't see that as a big worry right now. Because of this, West Asia, there was some pressure on our gross margins, okay?

Gul Raj Bhatia: Yeah.

Mohan Goenka: Kaustav, as I said, for the year, I don't see that as a big worry right now because of this West Asia. There was some pressure on our gross margins. Okay. I see that bouncing back very quickly. We have also taken aggressive price increases wherever needed. I don't see a margin pressure going forward. Also, there is a clear target for startups, for path to profitability. There also, most of our startups have reduced losses in this quarter compared to last year. Don't worry about this low margin businesses going faster because that's the consumer ask also. We can't just rely on certain baskets where margins are very high and the growth is coming from different. There has to be a good balance. Okay? Despite of all this, we are committed that our margins don't come down.

Speaker #5: But I see that bouncing back very quickly. We have also taken aggressive price increases wherever needed, so I don't see margin pressure going forward.

Speaker #5: Also, there is a clear target for startups, you know, to move towards profitability. So there also, most of our startups have reduced losses in this quarter.

Speaker #5: Compared to last year, so don't worry about this—low margin, businesses going faster—because that's the consumer ask also. We can't just rely on certain baskets where margins are very high, and the growth is coming from different sources. So there has to be a good balance, okay?

Speaker #5: But despite all this, you know, we are committed that our margins don't, you know, come down. That's a task that we have.

Mohan Goenka: That's a task that we have, and I'm confident that we'll be able to maintain our margins.

Speaker #5: And I'm confident that we'll be able to maintain our margins.

Speaker #4: No, when you say margins won’t come down, do you mean from the last two quarters’ base of around 20 to 22 percent, if you don’t include other income?

Kaustav Bugna: Now, when you say margins won't come down, do you mean from the last two quarters base of around 20% to 22%, if you don't include other income? Do you mean, because, you know, the last two quarters' margin has been relatively lower than previous quarters? What type of operating margin range before other income should we expect?

Kaustav Bubna: Now, when you say margins won't come down, do you mean from the last two quarters base of around 20% to 22%, if you don't include other income? Do you mean, because, you know, the last two quarters' margin has been relatively lower than previous quarters? What type of operating margin range before other income should we expect?

Speaker #4: Or do you mean, com because, you know, the last two quarters margin has been relatively lower than previous quarters. So so do you so what type of operating margin range, before the income should we expect?

Speaker #5: As I said, the cost of it is short-term because of the, you know, West Asia conflict, okay? Once it gets settled, we will have to wait and see.

Mohan Goenka: As I said, Kaustav, it is short term because of the West Asia conflict. Okay? Once it gets settled, we will have to wait and see. We are confident that we will be able to gain in coming quarters. Okay? With our aggressive price increases in some of our core businesses.

Speaker #5: We are confident that we will be able to gain in the coming quarters, okay? With our aggressive price increases in some of our core businesses.

Speaker #4: Okay, great. Thank you so much. Thank you.

Kaustav Bugna: Okay, great. Thank you so much.

Kaustav Bubna: Okay, great. Thank you so much.

Speaker #5: Yeah.

Gul Raj Bhatia: Thank you.

Kaustav Bugna: Yeah.

Mohan Goenka: Yeah.

Speaker #3: Thank you. The next question comes from the line of Weber Gupta from Goa Management. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Vaibhav Gupta from Bowhead Management. Please go ahead.

Operator: Thank you. The next question comes from the line of Vaibhav Gupta from Bowhead Management. Please go ahead.

Speaker #5: Yes, sir. Sir, I wanted to understand—the tax rate seemed a bit high this quarter; it was around 28–29%. So is this our normal tax rate going forward, or could it come down a bit?

Vaibhav Gupta: Yes, sir. Sir, wanted to understand that tax rate seemed a bit high this quarter, like it was 28% to 29%. Is this our normal tax rate going forward? It could come down a bit?

Speaker #5: It should be around 25–26 percent, Weber, this year. Because till last year, we were enjoying some fiscal benefits, and from this year, we are back to normal taxation of 25 percent.

Mohan Goenka: It should be around 25% to 26%, Vaibhav, this year, because till last year, we were enjoying some fiscal benefits. From this year, we are back to normal taxation of 25%.

Rajesh Sharma: It should be around 25% to 26%, Vaibhav, this year, because till last year, we were enjoying some fiscal benefits. From this year, we are back to normal taxation of 25%.

Speaker #5: Understood. And sir, given Cash King would have a very low base last year, so despite that, growing at mid-single digit, it seems a bit low.

Vaibhav Gupta: Understood. Sir, given Kesh King would have a very low base last year, so despite that, growing at mid-single digit, it seems a bit low. Are we taking any further initiatives or entering any new geographies to address this thing?

Speaker #5: Are we taking any further initiatives or entering any new geographies to address this?

Speaker #2: Cost of cash king is back on track. Whatever initiatives had to be taken have been taken. ठीक है? We have arrested our degrowth, and it is now growing.

Vaibhav Gupta: Kaustav, Kesh King is back on traction. Whatever initiatives had to be taken are taken. We have arrested our de-growth, it is now growing. There are a couple of new launches coming in under Kesh King, mostly in the D2C space. There is a lot of plan on most of our existing range also.

Mohan Goenka: Kaustav, Kesh King is back on traction. Whatever initiatives had to be taken are taken. We have arrested our de-growth, it is now growing. There are a couple of new launches coming in under Kesh King, mostly in the D2C space. There is a lot of plan on most of our existing range also.

Speaker #2: There are a couple of new launches coming in under Cash King, mostly in the D2C space. There are also a lot of plans for most of our existing range.

Speaker #2: You know?

Vaibhav Gupta: Understood.

Speaker #5: Understood. And sir, what about Zandu OTC? Also, I wanted to understand, in the Zandu Healthcare and Zandu Medico segments, what is the key difference, and what are the initiatives we have taken for these Healthcare and Medico pieces?

Mohan Goenka: Yeah.

Vaibhav Gupta: Sir, what about Zandu OTC? Also wanted to understand in the Zandu healthcare, Zandu medico, what is the key difference and what are the initiatives we have taken for this healthcare and medico piece?

Speaker #2: Gulraj drives this business. Gulraj, please take this.

Mohan Goenka: Gulraj drives this business. Gulraj, please take this.

Speaker #5: Sure, sir.

Gul Raj Bhatia: Sure, sir. Essentially for the OTC business, we have been focusing on our brand, we launched new positioning campaigns for Pancharishta and for our Nityam portfolios. We've seen strong double-digit growth in Q1. We've also launched some new products which are focused on using our sales team strength in sales and distribution. We are very hopeful that at the rest of the year also we'll be able to continue with double-digit growth for the OTC business. We are also planning plans for the winter season for some of our relevant brands there.

Speaker #2: So, essentially, for the OTC business, we have been focusing on our brand. We launched new positioning campaigns for Pancharishta and for our Nithyam portfolio, and we've seen strong double-digit growth in Q1.

Speaker #2: We've also launched some new products, which are focused on using our sales team's strengths in sales and distribution. So we are very hopeful that, for the rest of the year also, we'll be able to continue double-digit growth for the OTC business.

Speaker #2: We are also preparing plans for the winter season for some of our relevant brands there. We are also looking at consolidating our rural business there in terms of our sub-stockist towns.

Gul Raj Bhatia: We are also looking at consolidating our rural business there in terms of our sub-stockist towns. We had done an expansion last year, we want to now harvest and see that they give a better throughput month-on-month and quarter-on-quarter. On the medico business, we've had some new launches which have been fairly innovative, which are seeing a good response. We are also focusing on the top category A doctors to enhance our throughput with them, we are also looking at getting into smaller towns in a gradual manner, which currently are being under-serviced for the medico business.

Speaker #2: We had done an expansion last year, so we want to now harvest and see that they give a better throughput, month-on-month and quarter-on-quarter.

Speaker #2: On the medico business, we've had some new launches which have been fairly innovative and are seeing a good response. We are also focusing on the top Category A doctors to enhance our throughput with them.

Speaker #2: And we are also looking at getting into smaller towns in a gradual manner, which currently are being underserviced for the medico business.

Speaker #5: Understood. Understood. Got it, sir. That's all from my side.

Vaibhav Gupta: Understood. Got it, sir. That's all from my side.

Speaker #2: Thank you.

Rajesh Sharma: Thank you.

Vaibhav Gupta: Thank you.

Speaker #3: Thank you. The next question comes from the line of Kunal Vora from BNP Paribas. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Kunal Vora from BNP Paribas. Please go ahead.

Operator: Thank you. The next question comes from the line of Kunal Vora from BNP Paribas. Please go ahead.

Speaker #2: Yeah. Thanks, sir.

Kunal Vora: Yeah, thanks. First is, there is about INR 500 crore investment in Axiom and IncNut. How is it being funded, and should we assume lower interest income and higher interest expense going forward? Or that's largely already factored into current run rate?

Speaker #5: First is, there is about ₹500 crore investment in Exxon and Inc. How is it being funded, and should we assume lower interest income and higher interest expense going forward, or is that largely already factored into the current run rate?

Speaker #2: Yeah, Kunal. So it is, funded internally. So what whatever surplus we had, we have applied that only for these acquisitions. And, obviously, in this quarter, some of that has been factored.

Rajesh Sharma: Yeah, Kunal. It is funded internally. Whatever surplus we had, we have required that only for these acquisitions. Obviously, in this quarter, some of that has been factored and some bit of payments would be made going ahead. There will be slightly lower other income, obviously, compared to last year.

Mohan Goenka: Yeah, Kunal. It is funded internally. Whatever surplus we had, we have required that only for these acquisitions. Obviously, in this quarter, some of that has been factored and some bit of payments would be made going ahead. There will be slightly lower other income, obviously, compared to last year.

Speaker #2: And, s-some some bit of payments would be made going ahead. So there would be slightly lower income, obviously, compared to last year.

Speaker #5: Okay. Slightly lower other income compared to last year.

Kunal Vora: Okay. Slightly lower other income compared to last year.

Speaker #2: Yeah. Yeah. Yeah.

Rajesh Sharma: Yeah.

Mohan Goenka: Yeah.

Speaker #5: Okay. The second is, if I look at core business, excluding the strategic investments, the growth seems to be about 3 percent. This is that despite the GST rate cut and, the strength which we are seeing in mass consumption everywhere, so how are you seeing the growth for the portfolio, excluding the recently acquired subsidiaries?

Kunal Vora: Okay. The second is, if I look at core business, excluding the strategic investments, the growth seems to be about 3%. This is despite the GST rate cut and the strength which we are seeing in mass consumption everywhere. How are you seeing the growth for the portfolio, excluding the recently acquired subsidiaries?

Speaker #2: Kunal, the, excluding the investments, the growth rate is, hello, Kunal.

Rajesh Sharma: Kunal, excluding the investment, the growth rate is Hello, Kunal.

Mohan Goenka: Kunal, excluding the investment, the growth rate is Hello, Kunal.

Speaker #5: Yeah.

Kunal Vora: Yeah.

Speaker #2: So, excluding the domestic—if you look at our domestic business, that has grown by almost 6 percent. So, it is only because of international that it has come down.

Rajesh Sharma: Excluding the domestic, if you look at our domestic business, that has grown by almost 6%. It is only because of international it has come down, and because of its own challenges in Middle East. We have seen good growth as Mohanji said in his opening remarks in hair care business, 11%, 3% in skin care. Overall, around 6% growth is there in the core business.

Mohan Goenka: Excluding the domestic, if you look at our domestic business, that has grown by almost 6%. It is only because of international it has come down, and because of its own challenges in Middle East. We have seen good growth as Mohanji said in his opening remarks in hair care business, 11%, 3% in skin care. Overall, around 6% growth is there in the core business.

Speaker #2: And because of its own challenges in the Middle East. So we have seen good growth, as Mohanji said in his opening remarks, in the hair care business—11 percent, and 3 percent in skin care.

Speaker #2: So overall, around 6 percent growth is there in the core business.

Speaker #5: And how do you see it for the remainder of this year?

Kunal Vora: How do you see it for the remainder of this year?

Speaker #2: So, we expect some better numbers going ahead on the core business as well.

Rajesh Sharma: We expect some better numbers only going ahead on the core business also.

Speaker #5: Okay. Okay. Thank you.

Kunal Vora: Okay. Thank you.

Speaker #3: Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.

Operator 2: Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.

Operator: Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.

Speaker #3: Thank you, and over to you.

Speaker #5: Thank you. Thank you to all the participants for joining us today. And thank you, RFL. Thank you, Percy, for arranging this. Have a nice day.

Rajesh Sharma: Thank you. Thank you all the participants for joining us today. Thank you, IIFL, thank you, Percy, for arranging this. Have a nice day. Thank you.

Mohan Goenka: Thank you. Thank you all the participants for joining us today. Thank you, IIFL, thank you, Percy, for arranging this. Have a nice day. Thank you.

Speaker #5: Thank you.

Operator 2: Thank you. On behalf of IIFL and Emami, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you. On behalf of IIFL and Emami, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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Q1 2027 Emami Ltd Earnings Call

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