Q1 2027 Emami Ltd Earnings Call
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Speaker #4: Ladies and gentlemen, good day. 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. Welcome to Emami Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode. 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.
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Speaker #4: 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, Wholetime Director and Vice Chairman. Mr. Vivek Dhir, CEO, International Business. Mr. Gul Raj Bhatia, President, Healthcare. Mr. Manish Gupta, President, Sales. Mr. Dhruv Aggarwal, Chief Growth Officer. 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 #5: 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 #5: Mr. Vivek Gil, 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 #5: I'll 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 #6: 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: 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 IncNut. 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. More details on this is available in our presentation.
Speaker #6: 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 #6: 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 #6: 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. 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. 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, however, continued to be our strategic investment portfolio.
Speaker #6: 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 #6: Our 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 #6: 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 the high teens, while the Medico range posted single-digit growth.
Speaker #6: 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 have started their journey within the Emami ecosystem on a strong footing and are delivering encouraging underlying like-to-like growth. Taken together, 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 #6: 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.
Speaker #6: 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 #6: 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, digital-first brands, and emerging consumer platforms.
Speaker #6: This diversification not only broadens our growth runway, but also enhances the resilience of our business model across varying economic and consumption cycles. Our channel transformation journey also continues to gather pace.
Mohan Goenka: This diversification not only broadens our growth runway, but also enhances the resilience of our business model across varying economic and consumption cycles. 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 #6: Organized channels grew by 19% on a like-to-like basis and today contribute to 32% of our domestic business. Modern trade and e-com maintain strong momentum, with quick commerce now contributing 35% of our e-com business.
Speaker #6: International business declined by 12% during the quarter, primarily due to disruptions from 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.
Speaker #6: We have used this period to strengthen market fundamentals, improve pricing architecture, and enhance operational agility, and we remain confident of progressively regaining momentum and delivering healthy growth in the coming quarters.
Speaker #6: 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 cost 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 #6: 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 #6: 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 #6: 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.
Speaker #6: 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'm pleased to highlight that despite these cost pressures, EBITDA 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 crores and profit before tax grew by 4% to INR 195 crores. 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 crores, 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 #6: 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 #6: 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.
Speaker #6: 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 #6: 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, e-com, and quick com 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 #6: 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 #6: We are encouraged by the strong performance of our core brands, the rapid scaling of our digital-first brands, and sustained traction in modern trade, e-com, and quick commerce channels.
Speaker #6: 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 #6: 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 touchtone 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-segments, which one is driving this growth. Some of these are quite new. For example, Axiom became a subsidiary in Q1 only, and IncNut again from Q1 only. Some of these are quite new. I understand 61% like-to-like is comparing from the base. Still, if you can explain this strong growth, how sustainable is it? Where is it coming from? Company, of course, last 2, 3 years has been reasonably challenging. 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 in, in 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 the company, of course, for the last two or three years has been reasonably challenging. So, is it a base effect?
Speaker #2: Yeah. So, Abhinesh is driving this business. And I would request Dhruv to take this.
Mohan Goenka: Yeah. Abneesh, Dhruv is driving this business. I would request Dhruv to take this.
Speaker #3: Sure. So I think, across all four of the subsidiaries that are represented here, we've 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 have grown substantially both in terms of volume and value. When it comes to Axiom, while it is a new subsidiary, a new majority stake that we have, we have been involved since 2023. Since last year, we have been working on some of the initiatives that have started to reap the rewards. Overall, yes, it has been very good, 60%. Even P&P, which was struggling, like you said, over the last 2 years, that has grown north of 20%. Well north of 20%. It is actually across all. The only one I think that is slightly newer is IncNut in the portfolio. We are getting our hands dirty with that brand very quickly.
Speaker #3: When it comes to Axiom, while it is a new subsidiary and a new majority stake that we have, we've been involved since 2023.
Speaker #3: So we've got, you know, since last year we've been working on some of the initiatives that have started to reap the rewards.
Speaker #3: 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 #3: You know, well north of 20%. So, you know, it's actually across all. The only one, I think, that is slightly newer is Inknut 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 build-up due to new launches? For the balance three quarters, what is the expectation 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 #3: I think you'll see something similar, so this is quite sustainable.
Dhruv Aggarwal: I think you will 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 behind doing this now, because in one or two segments, frankly, it looks good to do category reporting.
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 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 Fair 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. How does this help? I understand category reporting a lot of other companies are doing, but how does this help?
Speaker #2: 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.
Speaker #2: So how does this help in terms of data point? If you could tell, I think the same issue will also be in healthcare. Pain management, again, is quite seasonal, and then you have clubbed that with Jundu Healthcare, which is far more strategic in nature, far more evenly balanced out every quarter.
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, Abhinesh, 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, 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 Balm, being a Zandu brand and Balm being a healthcare product, you know, the brand name is also Zandu.
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 each brand reporting, understood? Yeah, thank you. And there are more brands in the pipeline we are looking for, so how do we keep on reporting brand-wise information?
Abneesh Roy: Understood.
Mohan Goenka: Yeah.
Abneesh Roy: That's all from me. Thank you.
Dhruv Aggarwal: Thank you.
Mohan Goenka: There are more brands in the pipeline we are looking for. How do we keep on reporting brand-wise information?
Speaker #2: Understood. Yeah. Yeah.
Abneesh Roy: Understood.
Mohan Goenka: 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.
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, Mohanji. 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 #4: Yeah. So, 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 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, 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'm not worried for the whole year, Arnab, very honestly. I think the next three quarters should be relatively better than this.
Speaker #4: So, now that the pressure is also easing a bit, we are very confident on that front that we will be able to offset it with increased prices.
Speaker #4: 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 #4: 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: Mm-hmm. On margin. Mohanji, 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 expect the revenue to go back to the FY25 level in talcum 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 #4: Absolutely, Arnab, you are absolutely right. So, we would be able to recover, you know, and go back to the 25 number. 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 2025 numbers. Last year was a low number, but this year we are going to make up. You will see a substantially high numbers in this quarter for talc.
Speaker #4: Or you will see substantially high numbers in this quarter for talc.
Speaker #2: Mm-hmm. Got it. Got it.
Arnab Mitra: Got it.
Speaker #4: And for the whole year, you will see significantly high numbers.
Mohan Goenka: For the whole year, you will see a significantly high numbers.
Speaker #2: Mm-hmm. Got it. Got it. And my last question was on international business, where 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: 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 till 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 say till the hormones are closed, there is going to be a decline?
Speaker #2: till in the foreseeable future?
Speaker #4: Vivek, would you like to answer?
Mohan Goenka: Vivek, would you want to answer that?
Speaker #2: Yeah, yeah. So our portfolio is slightly different from the rest of the companies, which are essentially only into personal care. We are into the OTC space and pain management as well, in the Middle East.
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 sprays, 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 #2: So the pain management is all produced out of India only. Personal care is produced in the UAE as well as Germany, and a part of that is being produced in Thailand over there.
Speaker #2: We are not having much of an issue, so that is being fully resurrected. But in the OTC pain management space, we are still struggling because certain pain management products and other things have still not been able to move out of India.
Speaker #2: Till date, we are having hefty orders with us but are not able to move. We are trying to find solutions to get some approvals from the ministries, and hopefully in a few days we should be able to get something moved from India.
Vivek Dhir: We are trying to find solutions to get some approvals from the ministries, hopefully in two days we should be able to get something moved from India in that regard. If that is sorted, we should be fully sorted in terms of supply reinstatement to the markets. That is where we are struggling today. Rest of the, I think, personal care side, we are fairly, I think, balanced now.
Speaker #2: In that regard, if that is sorted, then we should be fully sorted in terms of supply and reinstatement to the markets. So, that is where we are struggling today.
Speaker #2: But the rest of the, I think, personal care side, we are fairly high now. Got it. Understood. That's it from my side.
Arnab Mitra: Got it, understood. That's it from my side. Over.
Speaker #4: 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 quarters 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 because we have realigned 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 #4: So I think, you know, you will see much better numbers in the third and fourth quarters.
Speaker #2: Got it. Got it. Right. Thanks.
Arnab Mitra: Got it.
Vivek Dhir: Right.
Arnab Mitra: Thanks for your input. 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.
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 growth can be broadly annualized to look at a yearly number. So, that's my first...
Speaker #4: Yeah, yeah, by and large, yeah. Dhruv, you can take the question. Yeah.
Mohan Goenka: Yeah. Dhruv, you can take that one, yeah.
Speaker #3: So I think Axiom has some developed 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 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 analyzing the figure, I think because IncNut, I think only one month's value will be reported in these numbers. Generally, if you analyze it, you should be fairly accurate in terms of what the annual
Speaker #3: You know, generally, if you analyze it, you should be fairly accurate in terms of what we're aiming for.
Speaker #2: Got it.
Harit Kapoor: Got it.
Speaker #4: 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%, if you see pure seasonality.
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%, 8%. It's mostly pure seasonality. If I'm not wrong, Dhruv.
Speaker #4: If I'm not wrong, Dhruv?
Speaker #3: 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 D2C brands.
Dhruv Aggarwal: No, absolutely. I think the next two quarters actually are high season for TMC and Velay because that's festive and that's where we do a lot of our sales even these are D2C brands. We've got a tough task ahead of us over the next two quarters.
Speaker #3: So we've got a fast ahead of us over the next two quarters.
Speaker #4: Yeah.
Harit Kapoor: Yeah. Got it. The second bit was, given that there's been a consolidation as well as acquisition in the last few months, do you expect that will 2027 be a year of where we kind of consolidate these four acquisitions, see them grow or build them out and then maybe look for incremental opportunities? That's something ongoing and one can even see more such initiatives even in the near to medium term.
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?
Speaker #2: Or, or that's something ongoing, and one can even see more such initiatives even in the near to medium term?
Speaker #3: I think we are doing this in parallel. We believe we've 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, right? I think across all of our brands, there is not one that hasn't grown, right? 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 those two or three more acquisitions, why not? We are looking very aggressively in parallel to see who else we can roll up here.
Speaker #3: 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, the capabilities constantly need to be added.
Speaker #3: And so if we can get two or three more engines inside the two or three more acquisitions, then why not? So we are looking very aggressively in parallel to see who has, you know, 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 the strategic investments.
Harit Kapoor: 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, because 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 of Neko, at this 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 like?
Speaker #4: Yeah, it's a mix because,
Dhruv Aggarwal: Yeah, it's a 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 #3: You know, each of these brands is at a different stage of growth. And of course, I'd like to think that all of them are ready for strong growth.
Speaker #3: 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. 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 Vaibhav 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.
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 crores.
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 Vaibhav. Fifteen includes dividend from one of our international subsidiaries, amounting to roughly ₹32 crore, which gets knocked off in consolidation.
Mohan Goenka: 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 cashing portfolio, and it was seeing good growth in H2 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, the growth has slowed down in this quarter. Could you share what has been happening here?
Speaker #5: But the growth has slowed down in this quarter. So, could you share what has been happening there?
Speaker #4: Growth has been mid- to high-single-digit, Vaibhav. So, it will be like, you know, some quarters—because maybe of some base effect and all—but we are expecting double-digit growth at the end of the year for the cashing portfolio.
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. There is nothing to worry.
Speaker #4: There's nothing to worry.
Speaker #5: Understood. And sir, how was the growth in really interesting brands in Q1? I wanted to see 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.
Speaker #3: I think individual growth rates we're not calling out. But Relay had a fabulous year, and the Rosemary Oil shots are really paying dividends for us, and consumers are very happy with that product.
Dhruv Aggarwal: I think individual growth rates we are not calling out, but Brillare had a fabulous year. I think the rosemary oil shots 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 #3: You know, so that's where I think we had well above average growth.
Speaker #5: Understood. Tha-thank you so much.
Vaibhav Gupta: Understood. Thank you so much.
Speaker #4: For the whole year, for all these startups, like 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.
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 #5: Okay, thank you. That's great, sir. Thank you.
Vaibhav Gupta: That's great, sir. Thank you.
Speaker #1: Thank you. The next question comes from the line of Percy Pentacki from IISI. Please go ahead.
Operator 2: 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.
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 all together and that will continue in future? Or you are planning to sort of have some kind of synergies or some kind of bundling of some of the functions? Also, how will the organization structure of this sort of strategic investments division look like, let's say, a year from now?
Speaker #5: I want to understand the D2C business. How are you running them right now? Are they operating as four separate companies, or altogether? And will that continue in the 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.
Speaker #3: Yeah, so right now, they are being run independently with their own CEOs. I think we have a Growth Office that's about seven or eight members.
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, MT channels. 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 a year from now also, we expect to maintain a similar sort of structure.
Speaker #3: 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 they need, whether it is content, international business, strategy, relationships with e-commerce, or, you know, GT, SAMP channel.
Speaker #3: So, I think that goes through me and my office, and so wherever we are able to help independently, we do that.
Speaker #3: Plus, within these companies, there's a lot of knowledge sharing and experience sharing. So, you know, that has also really helped in accelerating the pace of growth.
Speaker #3: 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 model.
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 had mentioned earlier. I think we like the, for the near term, at least next one year, we will keep it in this way.
Speaker #3: 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 #5: And what is the margin structure for the business as well?
Percy Panthaki: What is the margin structure for the business as a whole?
Speaker #4: Percy: So, 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: Percy,
Percy Panthaki: Yeah
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
Speaker #4: So, because this needs a different, you know, strategy and, you know, people,
Speaker #5: Sure.
Percy Panthaki: Sure
Speaker #4: So, you know, we have very aggressive plans, as we said, going forward for strategic investments, and we are looking for more such acquisitions.
Mohan Goenka: We have very aggressive plans, as we said, going forward for strategic investments, and we are looking for more such acquisitions. I think the team is by and large built under Dhruv's this thing, and as you 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 to 800 crores, 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 #4: So, I think the team is by and large built under Dhruv's, this thing. And as you said, all of these companies have very senior, you know, talent.
Speaker #4: Who are the CEOs for each individual business? So, and the business, once we end this year by ₹700–800 crore, you know, growing at almost 20 or 30 percent year on year.
Speaker #4: So, you know, it needs a different strategy and pace. And management is completely committed to investing behind these fast-growing segments.
Speaker #5: Understood. also.
Percy Panthaki: Understood. Also, can you help us
Speaker #4: So as and when we need people, you know, he's free to appoint them.
Mohan Goenka: As and when we need people, he's free to appoint them.
Speaker #5: 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?
Percy Panthaki: Yeah, sure. Dhruv, can you help us understand, 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 an EBITDA margin level?
Speaker #3: See, from a gross margin perspective, companies like TNC are north of 60%. Companies like Relay and Eknat are north of 70%. From an EBITDA perspective, I think I'll only be able to comment on the aggregates, where we are close to or at EBITDA neutral.
Dhruv Aggarwal: See, from a gross margin perspective, companies like TNC are north of 60%, companies like Brillare and IncNut 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 profits. I think net, there is a long-term target, two, three-year target, where we will get to a 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 #3: But, you know, 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 profit.
Speaker #3: 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, healthy amount of profitability.
Speaker #3: But if there if there is momentum right now, then we don't want to give up on that. because, you know, any, any growth in our top line at startups that are between 100 to 300 crores will only offset our fixed costs and help us in the long term.
Speaker #5: Sure. Sure. So, how long do you think—nowhere, sorry, sorry.
Percy Panthaki: Sure. How long are you planning
Mohan Goenka: Sorry, Saigurshan, 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 #4: Percy, I'm coming in here. See, none of our four startups have a gross margin below 55%. Axiom may be slightly lower, but the others are much above—yeah, more than 50%.
Speaker #4: Yeah. Dhruv, am I correct?
Mohan Goenka: Yeah.
Percy Panthaki: Right.
Mohan Goenka: Dhruv, am I correct?
Dhruv Aggarwal: Yes, absolutely. When it comes to BPC, the criteria for investing itself is high gross margin, and we're looking at low performance marketing spend, no brand marketing spend. We've reoriented our entire brand investment towards content, media, less offers and so on. I think it's all building for the long term.
Speaker #3: Yes, absolutely. I mean, when it comes to BPC, we are looking at—I mean, the criteria for investing itself is high gross margin.
Speaker #3: And we're looking at, you know, lower performance marketing spend, more brand marketing spend. We re-oriented our entire brand investments towards, you know, content, media, less offers, and so on.
Speaker #3: 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 2-year to 3-year perspective, or would it be more like a 5-year kind of a horizon?
Speaker #5: Would it be, like, a two- to three-year perspective, or would it be more like a five-year kind of a horizon?
Speaker #3: 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 is 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 #3: And then we'll take it from there.
Speaker #5: Understood. And, lastly, could you give me the channel split? I'm assuming that there is no brick-and-mortar, or if there is, please 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, and third-party websites or apps?
Speaker #3: Yeah. See, in aggregate, it would be very—it would be very different because, you know, for a company like Eknat, which does personalized daycare, they're in largely on my website.
Dhruv Aggarwal: Yeah. See, in aggregate, it would be very different because for a company like IncNut, which does personalized hair care, they're largely on my website. For a company like Brillare or TNC, 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 #3: For a company like Relay 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 #3: Actually, we have a phenomenal offline network. So most of our sales there are offline, across states from north to south. We sell in Jammu.
Speaker #3: 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 #4: So, at an overall level,
Percy Panthaki: At an overall level for the entire vertical, roughly, what would be your split between own assets, third-party digital assets, and offline?
Speaker #5: At the level for the entire vertical, roughly, what would be your 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 #3: At an overall level, I would think you can put maybe 20% offline.
Speaker #5: Mm-hmm.
Speaker #3: I think 20% own assets, and then the remaining will be—sorry, probably 25% to 30% own assets, and then the remaining will be e-com, quick com, and other platforms.
Dhruv Aggarwal: I think 20% own assets, sorry, probably 25% to 30% own assets, and then the remaining will be e-com, quick com, 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. Else, we can close the call. Yeah, there is one. Asar, you can go ahead.
Speaker #5: Or else, we can close the call. Yeah. There is one. Asava, you can go ahead.
Speaker #2: Thank you. The next question comes from the line of Kostav Bhubna from BMSPL Capital. Please go ahead.
Operator 2: Thank you. The next question comes from the line of Kaustav Bubna from DMSPL Capital. Please go ahead.
Speaker #1: Yeah. So please explain to me this, you know, 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.
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 #1: 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 #1: 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 #1: So could you just explain that whole part?
Speaker #4: Yeah.
Mohan Goenka: Yeah. 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 these 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 all this, we are committed that our margins don't come down.
Speaker #5: So, cost of, 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?
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 are 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 areas, 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 #1: 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 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? Or do you mean Because 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 #1: 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 increase 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. Once it gets settled, we will have to wait and see. We are confident that we will be able to gain in coming quarters 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 #1: Okay, great. Thank you so much. Thank you.
Kaustav Bubna: Okay, great. Thank you so much.
Mohan Goenka: Thank you.
Speaker #5: Yeah.
Kaustav Bubna: Yeah.
Speaker #2: Thank you. The next question comes from the line of Weber Gupta from Goahead Management. Please go ahead.
Operator 2: Thank you. The next question comes from the line of Vaibhav Gupta from GoEd Management. Please go ahead.
Speaker #5: Yes, sir. Sir, I wanted to understand—the tax rate seemed a bit high this quarter, like it was 28 or 29 percent. 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, or it could come down a bit?
Speaker #4: Well, 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%.
Speaker #5: Understood. And sir, given that Cash King had a very low base last year, so despite that, growing at mid-single digits seems a bit low.
Vaibhav Gupta: Understood. Sir, given Kesh King would have a very low base last year, 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 issue? Cost of cash king is back on track. Whatever initiatives had to be taken have been taken.
Rajesh Sharma: Kaustav, Kesh King is back on traction. Whatever initiatives had to be taken, I've taken. We have arrested our de-growth, and 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 #5: ठीक है? We have arrested our degrowth. There are a couple of new launches coming, and under 'Cash King, Cash King,' mostly in the D2C space.
Speaker #5: There are a lot of plans for most of our existing range also. You know? Understood.
Vaibhav Gupta: Understood.
Speaker #4: Yeah.
Mohan Goenka: Yeah.
Speaker #5: And sir, what about Zandu OTC? Also, I wanted to understand, in Zandu Healthcare and Zandu Medico, what is the key difference? And what are the initiatives we have taken for this healthcare and medico piece?
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 #4: Gulraj drives this business. Gulraj, please take this.
Mohan Goenka: Gul Raj drives this business. Gul Raj, please take this.
Speaker #5: Sure, sir. So, essentially for the OTC business, we have been focusing on our brand, and we launched new positioning campaigns for Pancharishta and for our Nityam portfolios.
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 and 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. We are also looking at consolidating our rural business there in terms of our sub-stockist towns. 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 #5: And we've seen strong, double-digit growth in Q1. We've also launched some new products, which are focused on using our sales team’s strength in sales and distribution.
Speaker #5: 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 #5: 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.
Speaker #5: We had done an expansion last year, so now we want to harvest and see that they give a better throughput, month on month and quarter on quarter.
Speaker #5: 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.
Gul Raj Bhatia: 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 underserved for the medico business.
Speaker #5: And we are also looking at getting into smaller towns in a gradual manner, which currently are being underserviced for the medico business. Understood. Understood.
Vaibhav Gupta: Understood. Got it, sir. That's all from my side.
Speaker #5: Got it, sir. That's all from my side.
Speaker #4: Thank you.
Gul Raj Bhatia: Thank you.
Speaker #2: 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.
Speaker #4: Yeah. Thanks. first is, there is about 500 crore investment in Exxon and in, in, in. Right. how is it being funded, and should we assume lower interest income and higher interest expense going forward, or that's largely already factored in the current run rate?
Kunal Vora: Yeah, thanks. First is, there is about INR 500 crore investment in Axiom and in Currit. How is it being funded, and should we assume lower interest income and higher interest expense going forward, or that's largely already factored in the current run rate?
Speaker #3: Yeah, Kunal. So it is, funded internally. So what whatever surplus we had, we have deployed that only for these acquisitions. And, obviously, in this quarter, some of that has been factored.
Mohan Goenka: Yeah, Kunal. It is funded internally. Whatever surplus we had, we have deployed that only for these acquisitions. Obviously, in this quarter, some of that has impacted and some bit of payments would be made going ahead. There will be slightly lower other income, obviously, compared to last year.
Speaker #3: And, s-some, some bit of payments would be made going ahead. So there would be slightly lower other income, obviously, compared to last year.
Speaker #4: Okay. Slightly lower other income compared to last year.
Kunal Vora: Okay. Slightly lower other income compared to last year.
Speaker #3: Yeah. Yeah. Yeah.
Mohan Goenka: Yeah.
Speaker #4: 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.
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 subsidiary?
Speaker #4: so how are you seeing the growth for the portfolio, excluding the recently acquired subsidiaries?
Speaker #5: Kunal, the, excluding the investments, the growth rate is, hello, Kunal.
Mohan Goenka: Kunal, excluding the investment, the growth rate is Hello, Kunal?
Speaker #4: Yeah.
Kunal Vora: Yeah.
Speaker #5: So, excluding the domestic, if you look at our domestic business, that has grown by almost 6%. 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.
Speaker #5: 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%—and 3% in skin care.
Speaker #5: So overall, around 6% growth is there in the core business.
Speaker #4: 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 #5: So, we expect some better numbers going ahead on the core business also.
Mohan Goenka: We expect some better numbers only going ahead on the core business also.
Speaker #4: Okay. Okay. Thank you.
Kunal Vora: Okay. Thank you.
Speaker #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.
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.
Speaker #2: Thank you, and over to you.
Speaker #3: 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.
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 #3: Thank you.
Operator 2: Thank you. On behalf of IIFL and Emami, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
