Q1 2027 Sundrop Brands Ltd Earnings Call

August 7, 2026

Operator: Ladies and gentlemen, good day and welcome to Sundrop Brands Limited Q1 FY27 earnings conference call, hosted by Anand Rathi Shares and Stock Brokers Limited. As a reminder, all participant lines will be in the 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 a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ajay Thakur from Anand Rathi Shares and Stock Brokers Limited. Thank you, and over to you, sir.

Speaker #1: 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.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on a touch-tone phone. Please note that this conference is being audited. Thank you.

Speaker #1: From Anand Reddy Shares and Stock Brokers Limited, thank you, and over to you, sir.

Speaker #2: Hello, good afternoon, everyone. We welcome you all to Sundrop Brands Limited Q1 FY27 earnings conference call, hosted by Anand Reddy Shares and Stock Brokers.

Ajay Thakur: Hello. Good afternoon, everyone. We welcome you all to Sundrop Brands Limited Q1 FY27 earnings conference call hosted by Anand Rathi Shares and Stock Brokers. From the management side, we have Mr. Nitish Bajaj, Group Managing Director, Mr. Asheesh Kumar Sharma, CEO and Executive Director, and Mr. K.P.N. Srinivas, CFO. Without much further ado, I shall like to hand over the floor to Mr. Nitish Bajaj for his opening comment followed by Q&A. Over to you, sir.

Speaker #2: From the management side, we have Mr. Nitish Bajaj, Group Managing Director; Mr. Ashish Kumar Sharma, CEO and Executive Director; and Mr. KPN Srinivas, CFO.

Speaker #2: Without much ado, I would like to hand over the floor to Mr. Nitish Bajaj for his opening comments, followed by the Q&A session. Over to you, sir.

Speaker #3: Yeah, hi, thank you, Ajay. And good morning, all. Very happy to be with all of you. I would just like to make one more addition here.

Nitish Bajaj: Yeah. Hi. Thank you, Ajay, and good morning all. Very happy to be with all of you. I would just like to make one more addition here. We also have on the call Abhinav Kapoor, who is our CEO for Del Monte business, and Amitosh Kumar Banka, who is our CFO for Del Monte business. That is the team today available for all of us on the call. As I go along the presentation, I would keep referring to the slide numbers so that you can relate from where I am making certain comments. Starting with my set of presentation, I am moving straight to page number three. A quick recap for some of you who may be joining for the first time with us on our vision and mission.

Speaker #3: We also have on the call Abhinav Kapoor, who is our CEO for the Del Monte business, and Amitosh Kumar Manka, who is our CFO for the Del Monte business.

Speaker #3: So that's the team today available for all of us on the call. As I go along with the presentation, I will keep referring to the slide numbers so that you can relate to where I am making certain comments.

Speaker #3: So, starting with my set of presentation, I am moving straight to page number 3. A quick recap for some of you who may be joining for the first time with us.

Speaker #3: On our vision and mission, as an organization, we stay true to our mission of bringing a joyful food experience to the modern, evolving consumers. Which means that we would work on a portfolio which has a broader pan-India or a pan-greater India appeal.

Nitish Bajaj: As an organization, we stay true to our mission of bringing joyful food experience to the modern evolving consumers, which means that we would work on a portfolio which has a broader pan-India or a pan-greater India appeal. Of course, we shall continue to deliver it through bringing innovative, delicious, and convenient packaged food solutions to our consumers. Also, as a key part of our thesis of why we are a very good platform, Sundrop Brand has gradually started to emerge now as a food platform with reasonable scale and, of course, a very strong profitable growth opportunity in the periods ahead. We have done it through addition of Del Monte Foods business to our portfolio, which happened in February 2025. As a combined organization, today, we operate in categories which have high growth and also have reasonably strong margins.

Speaker #3: Of course, we shall continue to deliver it by bringing innovative, delicious, and convenient packaged food solutions to our consumers. Also, as a key part of our thesis for why we are a very good platform, Sundrop Brands has gradually started to emerge now as a food platform with reasonable scale and, of course, a very strong, profitable growth opportunity in the periods ahead.

Speaker #3: We have done it through the addition of the Del Monte Foods business to our portfolio, which happened on February 25. As a combined organization, today we operate in categories which are high growth and also have reasonably strong margins.

Speaker #3: We have brought in a very intensive focus on our core portfolio, so we have made strategic choices around the portfolio in which we shall invest, which we have been investing in over the last 18 to 24 months.

Nitish Bajaj: We have brought in a very intensive focus on our core portfolio. We have made strategic choices around portfolio, which we have been investing in over last 18 to 24 months. Those sharp calls are also starting to show dividends in the way our growth trajectory has shaped up over last one and a half to two years. We do have very strong and growing salience in emerging alternate and fast-growing channels, which is specifically to call out modern trade and e-commerce. There, our salience is also significantly increasing. As a management, our team is focused on profitable growth as a key thesis. We are working strongly to improve our EBITDAs, leveraging the scale benefits, leveraging the platform benefit of the organization, and also consistently looking at cost efficiency and value improvement opportunities for our products and portfolio and the way we operate business.

Speaker #3: And those sharp calls are also starting to show dividends in the way our growth trajectory has shaped up over the last one and a half to two years.

Speaker #3: We do have very strong and growing salience in emerging, alternate, and fast-growing channels. Specifically to call out modern trade and e-commerce, their salience is also significantly increasing.

Speaker #3: As a management, our team is focused on profitable growth as a key thesis. We are working strongly to improve our EBITDAs, leveraging the scale benefits, leveraging the platform benefit of the organization, and also consistently looking at cost efficiency and value improvement opportunities for our products and portfolio, and the way we operate business.

Speaker #3: Overall, our thesis has seen a little bit of change historically. We were more driven by capexes within the organization to drive growth as a thesis.

Nitish Bajaj: Overall thesis has seen a little bit of change. Historically, we were more driven with CapEx within the organization to drive growth as a thesis. We have changed it over last two years to say that we will follow a capital-efficient approach, which means we will use a mix of good manufacturing platform available outside of our own ecosystem also, and use third-party systems wherever available and of high quality order to drive innovation and growth, and of course, expand the efficiency and utilization of our own capital assets. We are also driven to look at both. While we grow organically on the portfolio, we are actively also looking at inorganic opportunities, which could help us accelerate the growth momentum of our business. As a platform today, I am moving on to slide number five. As a platform today, we have three key brands, Act II, Del Monte, and Sundrop.

Speaker #3: We have changed it over the last two years to say that we will follow a capital-efficient approach. Which means we will use a mix of good manufacturing platforms available outside of our own ecosystem also, and use third-party systems wherever available and of high quality, in order to drive innovation and growth.

Speaker #3: And of course, expand the efficiency and utilization of our own capital assets. We are also driven to look at both—while we grow organically within the portfolio, we are actively also looking at inorganic opportunities, which could help us accelerate the growth momentum of our business.

Speaker #3: As to page number, site number 5. As a platform today, we have three key brands: ACT II, Del Monte, and Sundrop. Just as a quick reminder, for ACT II and Del Monte, we have perpetual licenses for the greater India geography.

Nitish Bajaj: Just as a quick reminder, Act II and Del Monte, we have perpetual licenses for Greater India geography. When I say Greater India geography, it covers India, Sri Lanka, Nepal, Bangladesh, and also Myanmar, Bhutan geographies. We have a perpetual license for these two brands. For larger geography, we are also affiliated with the parent companies, and we have exclusivity to be having the first right of anything which they would want to bring in these brands in this part of the country. We, of course, have global rights for Sundrop brand, and these three brands put together form the bulk of our business as we operate today. Coming to Q1 numbers, I am on slide number six. I am very happy to share that we have consistently been delivering accelerated growth trajectory, and in this quarter, we have closed the quarter with a 15% consolidated revenue growth.

Speaker #3: When I say "Greater India geography," it covers India, Sri Lanka, Nepal, Bangladesh, and also Myanmar and Bhutan geographies. So we have a perpetual license for these two brands.

Speaker #3: For larger geography, we are also affiliated with the parent companies, and we have exclusivities to have the first right of anything which they would want to bring in these brands in this part of the country.

Speaker #3: We, of course, have global rights for the Sundrop brand and these three brands put together form the bulk of our business, as we operate today.

Speaker #3: Coming to the quarter one numbers, I'm on page number, slide number 6. I'm very happy to share that we have consistently been delivering an accelerated growth trajectory, and in this quarter we have closed with a 15% consolidated revenue growth.

Speaker #3: Some key insights to this: Of course, sequentially, we have grown 11% over the last quarter and 15% over the previous quarter. Quarter on quarter, and year on year.

Nitish Bajaj: Some key insights to this. Of course, sequentially, we have grown 11% over last quarter, 15% over same quarter last year. Within the mix, if I have to look at, our B2B business has continued to be a shade better than our overall business, growing at 18%. Our e-commerce, which is very important future growth channel for us, has maintained a strong trajectory ahead of industry growth rates at 32%, which means we are gaining share there in most categories we operate in. Our investments, we have been upping our investment right from Q4 of FY25 in Sundrop business and Q1 of FY26 in Del Monte business. As we have moved on that journey, we have also understood much more sharply as to which initiatives are giving stronger outcomes.

Speaker #3: Within the mix, if I have to look at it, our B2B business has continued to be a shade better than our overall business, growing at 18%.

Speaker #3: Our e-commerce, which is a very important future growth channel for us, has maintained a strong trajectory, ahead of industry growth rates, at 32%. This means we are gaining share there in most categories we operate in.

Speaker #3: Our investments—we have been upping our investment right from Q4 of FY25 in the Sundrop business, and in Q1 of FY26 in the Del Monte business.

Speaker #3: So, as we have moved on that journey, we have also understood much more sharply which initiatives are giving stronger outcomes, and hence, today we operate at a much healthier level of AMP spends as a percentage of total sales.

Nitish Bajaj: Hence, today, we operate at a much healthier level of A&P spends as a percentage of total sales, and we have been growing them either sequentially or quarter on quarter. Overall, our levels is significantly higher than previous years. We have been looking at expanding our margins. Of course, last year we had seen rapid margin expansion driven by specific initiatives where we had got external partners to look at our cost efficiencies. We have been able to maintain and sustain those and also build on to those. In this quarter also, while the environment was very inflationary and we are all aware, we have seen significant inflation in certain commodities, significant inflation in packaging material side. Despite that environment, we have been able to further improve our gross margins by about 110 basis points.

Speaker #3: And we have been growing them either sequentially or quarter on quarter, but overall, our level is just significantly higher than previous year, previous years.

Speaker #3: We have been looking at expanding our margins. Of course, last year we saw rapid margin expansion driven by specific initiatives where we brought in external partners to look at our cost efficiencies.

Speaker #3: We have been able to maintain and sustain those, and also build onto those. So, in this quarter—which was very inflationary, as we are all aware—we have seen significant inflation in certain commodities and significant inflation on the packaging material side. But despite that environment, we have been able to further improve our gross margins by about 110 basis points.

Speaker #3: And as we have closed the quarter, we have closed the quarter at a very stable, healthy EBITDA margin of 7%, which is a very similar number to what we also achieved in Q4 of last year.

Nitish Bajaj: As we have closed the quarter, we have closed the quarter at a very stable, healthy EBITDA margins of 7%, which is what we also have achieved very similar number in Q4 of last year. Moving on to slide seven, I will give you some flavor of the two businesses inside. Sundrop business is about 56% of our total business, has grown in Q1 at about 16%, accelerated somewhat from our 14% growth in Q4, 15% growth in Q1 last year, and a full year growth of 12% last year. Similarly, if I look at Del Monte business, which is another 44, 45% of our total business, has accelerated to 14% growth. Same number in Q4 was about 9%, was in Q1 last year at about 8%, and full year last year was about 9%. As a group, we have accelerated growth.

Speaker #3: Moving on to slide number 7, I will give you some flavor of the two businesses inside. The Sundrop business is about 56% of our total business and has grown in Q1 at about 16%.

Speaker #3: Accelerated somewhat from our 14% growth in Q4, 15% growth in Q1 last year, and a full-year growth of 12% last year.

Speaker #3: Similarly, if I look at Del Monte Business—which is another 44, 45 percent of our total business—it has accelerated to 14% growth. The same number in Q4 was about 9%, it was in Q1 last year at about 8%, and for the full year last year was about 9%.

Speaker #3: So, as a group, we have accelerated growth. The important point I would want to make is that whatever we are doing is driving our growth sustainably.

Nitish Bajaj: The important point I would want to make is whatever we are doing is driving our growth sustainably. You are continuously seeing marginal accelerations, but fundamentally, we are wired to drive capital efficient growth as of last week. We are continuously working to up the ante, but you would only see on a quarter-on-quarter basis marginal improvements, which you would have seen over last year, where we moved from, let's say, from about 4, 5% growth, which we had before we really took the investment thesis on this business, to about 15% growth now. On the choices we have made, and now on slide eight, our core categories where we invest. That business is, of course, showing greater acceleration overall, and today contributes to about 60% of our total business, up from about 53%, about three and a half years back.

Speaker #3: So you are continuously seeing marginal accelerations, but fundamentally we are wired to drive capital efficient growth, capital efficient growth as a philosophy. So we are continuously working to up the ante, but you would only see on the quarter on quarter basis marginal improvements, which you would have seen over the last year, where we moved from, let's say, from about 4, 5 percent growth, which we had before we really took the investment thesis on this business, to about 15% growth now.

Speaker #3: On the choices we have made—and I'm now on slide number 8—are core categories where we invest. That business is, of course, showing greater acceleration overall, and today contributes to about 60% of our total business, up from about 53% about three and a half years back.

Speaker #3: This may have gone down a little versus Q4, which was steady at about 62, because we are seeing some of our initiatives taken on staples or our premium staple oil business continue to do well for us and drive growth in line with our overall business growth.

Nitish Bajaj: This may have gone down a little versus Q4, which was where it stood at about 62%, because we are seeing some of our initiatives taken on staples or our premium staple oil business continuing to do well for us and driving growth in line with our overall business growth. While that is still not from an advertising set of investment growth portfolio for us, but whatever we are doing on the fact commodity side management, cost side management, is helping us maintain a good growth rate even in our oils business. I'm moving to now slide nine, which is where our core category and staple business is covered. On the popcorn business, very happy to say that we have been consistently maintaining over the last full year and also multiple quarters, a growth rate of close to 18%.

Speaker #3: So, while that is still not from an advertising set of investment growth portfolio for us, whatever we are doing on the back commodity side management and cost side management is helping us maintain a good growth rate, even in our oils business.

Speaker #3: I'm moving now to slide number 9, which is where our core category and staple business are covered. So, on the popcorn business, very happy to say that we have been consistently maintaining, over the last full year and also multiple quarters, a growth rate of close to 18%.

Speaker #3: And this is backed by very strong volume growth of 12%, and hence, this is a very strong growth hero, which is driven by our investment thesis for the business.

Nitish Bajaj: This is backed by a very strong volume growth of 12%, and hence this is a very strong growth hero, which is driven by our investment thesis for the business. On culinary, which is a mix of ketchup, mayo, and dressings business, we have seen acceleration of growth, with growth moving to 15%, versus about 10% last year. On the volume side, the business has been growing at about 8%. I think our volume growth has been stable. We have been able to increase the pricing power. Also, of course, some of the pricing decisions were necessitated by the commodity environment in this business, which we were able to pass to the consumers while maintaining our volume growth momentum. Moving on to premium staples business.

Speaker #3: On Culinary, which is a mix of ketchup, mayo, and dressings business, we have seen acceleration of growth, with growth moving to 15%, versus about 10% last year.

Speaker #3: On the volume side, the business has been growing at about 8%. So, I think our volume growth has been stable. We have also been able to increase our pricing power.

Speaker #3: Also, of course, some of the pricing decisions were necessitated by the commodity environment in this business, which we were able to pass on to the consumers while maintaining our volume growth momentum.

Speaker #3: Moving on to the premium staples business, again, very strong growth trajectory of 16% in value and 7% in volume. Versus Q4, it is a shade lower on value, which was about 20%. But if I were to look at the full year last year's perspective, we have maintained the growth rate of about 16%.

Nitish Bajaj: Very strong growth trajectory of 16% in value, 7% in volume versus Q4. It is a shade lower on value which was at about 20%, but if I were to look at full year last year perspective, we have maintained the growth rate of about 16%, and from a full year trajectory, our growth has expanded to 7% this year versus about 3% last year. Italian business, which I had talked about, which is mix of our olive oil and pasta business, again, very strong, this is the first time we are returning to value growth in this business. We had talked about our commodity environment, which has softened in this business in last year, which we had passed on to consumers. While we were growing volume, we were seeing value decline last year.

Speaker #3: And from a full-year trajectory, our growth has expanded to 7% this year versus about 3% last year. The Italian business, which I had talked about, is a mix of our olive oil and pasta business.

Speaker #3: Again, very strong. And this is the first time we are returning to value growth in this business. We had talked about our commodity environment, which has softened in this business in the last year, which we had passed on to consumers.

Speaker #3: Because of this, while we were growing volume, we were seeing value decline last year. As we enter into this year, we are now seeing the situation rectifying, with both value and volume growth.

Nitish Bajaj: As we enter into this year, we are now seeing the choice rectifying into both value and volume growth. Our volume growth has been more or less maintained at a last year level of 16% to 17%, while we have returned to an 8% value growth. This value growth should further expand to closer to 15% value growth if we are able to sustain our volume growth of 15% in the quarters ahead. Peanut butter or our spreads business, peanut spread business, that has been a spot of bother for us. We have taken certain calls. I would say we have some signs of recovery on this business, but it still continues to be negative. While we were about -8% to -10% negative in value and volume last year, we have been able to bring it to about a 3% decline in this period.

Speaker #3: So our volume growth has been more or less maintained at last year's level of 16% to 17%, while we have returned to an 8% value growth.

Speaker #3: And this value growth should further expand to closer to 15% value growth if we are able to sustain our volume growth of 15% in the quarters ahead.

Speaker #3: The peanut butter, or our spreads business—the peanut spread business—has been a spot of bother for us. We have taken certain calls. I would say we are seeing some quick signs, some signs of recovery, in this business, but it still continues to be negative.

Speaker #3: So, while we were about 8 to 10 percent negative in value and volume last year, we have been able to bring it to about a 3% decline in this period.

Speaker #3: I will give you some flavors as we get into the category on slides ahead. Moving on to slide number 10, on the popcorn business of ours—both ready-to-eat and ready-to-cook formats.

Nitish Bajaj: I will give you some flavor as we get into category on slides ahead. Moving on to slide number 10. On the popcorn business of ours, both ready-to-eat and ready-to-cook formats are showing very strong growth. Ready-to-cook business, which is the historical business, continues to grow at about 9%. This is the way the business had originated for us. Along the journey, we had also expanded our presence into convenient, ready-to-eat formats, that business has been accelerating growth year-on-year, quarter-on-quarter, and we are now running at about 39% growth, up from about 33% growth we had last year. The momentum is further strengthening.

Speaker #3: Are showing very, very strong growth. The ready-to-cook business, which is the historical business, continues to grow at about 9%. This is the way the business had originated for us.

Speaker #3: Along the journey, we have also expanded our presence into convenient, ready-to-eat formats, and that business has been accelerating growth year on year, quarter on quarter. We are now running at about 39% growth, up from about 33% growth we had last year.

Speaker #3: So the momentum is further strengthening. This momentum, which to eat business, is driven a lot by distribution-led penetration in general trade because we see there is a very strong opportunity to expand the penetration of the ready-to-eat category in West and South, and we have already been able to demonstrate that in North followed by East.

Nitish Bajaj: This momentum, which is expansion in ready-to-eat business, is driven a lot by distribution-led penetration in the general trade. We see there is a very strong opportunity to expand the penetration of ready-to-eat category in west and south, and we have already been able to demonstrate that in north, followed by east. North followed by east, we have been able to establish this category very deeply in terms of distribution, and we are working to expand that in west and south as we go along the growth journey on ready-to-eat business. On ready-to-cook business, again, it is a mix of driving new trials through distribution expansion, where our INR 10 price point plays a very critical role. We are seeing the evolution of quick commerce channel in the country.

Speaker #3: So, North followed by East, we have been able to establish this category very deeply in terms of distribution, and we are working to expand that in West and South as we go along the growth journey on the ready-to-eat business.

Speaker #3: On the ready-to-cook business, again, it is a mix of driving new trials through distribution expansion, where our repeat price point plays a very critical role. But as we have gone into it, we are seeing the evolution of the quick commerce channel in the country.

Speaker #3: That is also helping us drive consumption of in-home, both through ready to cook formats and also ready to eat formats. In higher pack sizes and higher pack price.

Nitish Bajaj: That is also helping us drive consumption of in-home, both through ready-to-cook formats and also ready-to-eat formats, in higher pack sizes and higher pack volume. Quick commerce channel is actually helping us drive consumption at home, but that is coming through a mix of both ready-to-cook and ready-to-eat formats. We are working to expand our sweet popcorn and cheese portfolio because in these we see strong growth opportunities. In Q1, we did some launches, specifically in the sweet corn popcorn area, where we do see strong growth opportunity as our country is a sweet tooth country, and this is one segment which Act II has historically not exploited. We are starting to work in that area as well to drive our growth stronger. Moving on to slide 11. On edible oil business, as I said, our growth momentum has been sustained.

Speaker #3: So, the quick commerce channel is actually helping us drive consumption at home, and that is coming through a mix of both ready-to-cook and ready-to-eat formats.

Speaker #3: We are working to expand our sweet popcorn and cheese portfolio because in these we see strong growth opportunities. So in Q1, we did some launches specifically in the sweet corn popcorn area, where we do see strong growth opportunity as our country is a sweet tooth country, and this is one segment which actually has historically not been exploited.

Speaker #3: So, we are starting to work in that area as well to drive our growth stronger. Moving on to slide number 11. On the edible oil business, as I said, our growth momentum has been sustained.

Speaker #3: We are very happy to share that we are now growing in volume. Historically, we have had situations where a lack of focus on this category had led to volume declines.

Nitish Bajaj: We are very happy to share that we are now growing in volume. Historically, we have had situation where lack of focus on this category had led to volume declines. Now by maintaining a very selective, sharp focus in certain geographies of strength, channels of strength, we are able to now get both volume and value growth in this category. Value growth, I must say, is linked to the inflationary environment in this category. Generally, this category is price-sensitive. Our stated position on this category will be to protect volumes. Going forward, we would want to at least grow 4% to 5% on volume terms, outpacing the category growth or at least be in line with category growth in this business.

Speaker #3: But now, by maintaining a very selective, sharp focus in certain geographies of strength and channels of strength, we are able to get both volume and value growth in this category.

Speaker #3: Value growth, I must say, is linked to the inflationary environment in this category. Generally, this category is price sensitive. Our stated position on this category will be to protect volumes and, going forward, we would want to at least grow 4 to 5 percent in volume terms—outpacing the category growth, or at least be in line with the category growth in this business.

Speaker #3: As a distinct approach, what we have also done is looked at selective innovations, selective channel focus, new pack size introductions, et cetera, where we found growth opportunities. Those initiatives are helping us do well in this category.

Nitish Bajaj: What we have also done is we have looked at selective innovations, selective channel focus, new pack size introductions, et cetera, where we found growth opportunities. Those initiatives are helping us do well in this category. Moving on to peanut spreads business. We do face headwinds on this business in modern trade and e-commerce channel because market moved from plain peanut butter formats to more value-added formats like chocolate-flavored variants or higher protein fortification variants. We were late to do innovations in those categories, and we had seen the impact of that in share. Over last 9 months, we have been able to beef up our portfolio with a full-fledged range in these high-growth variants, whether it is high protein segment or a chocolate segment, and that is now starting to see some results in e-commerce, quick commerce channel, where we have returned to a growth of 16%.

Speaker #3: Moving on to the peanut spreads business, we do face headwinds in this business in modern trade and e-commerce channels because the market has moved from plain peanut butter formats to more value-added formats, like chocolate-flavored variants or higher protein fortification variants.

Speaker #3: We were late to do innovations in those categories, and we had seen the impact of that in share. Over the last nine months, we have been able to beef up our portfolio with a full-fledged range in these high-growth variants, whether it is the high-protein segment or the chocolate segment, and that is now starting to see some results in e-commerce and quick commerce channels, where we have returned to a growth of 16%.

Speaker #3: And that is what is helping us arrest the decline in this business, from an 8% to 10% decline when we closed Q1 last quarter. We are very confident that this strategy will help us return to growth in this category.

Nitish Bajaj: That is what is helping us arrest the decline in this business from a 10% decline last year to a 3% decline as we closed Q1. We are very confident that this strategy will help us return back to growth in this category. Our overall ambition would stay to get our foods business to grow at mid-teens to high teens level. We would stay focused to get our peanut butter business also in this dimension as we move along our investment journey on this business. Moving on to slide 13. On the culinary business, which I said is a mix of tomato ketchup, some mayo business. This business is fairly distributed business in both retail and B2B side. We are seeing very strong growth in B2B, which is helping us expand this business stronger. Of course, our B2C business is also growing.

Speaker #3: Our overall ambition would stay to get our foods business to grow at mid-teens to higher teens level, and we would stay focused to get our ready-to-eat and our peanut butter business also in this dimension as we move along our investment journey on this business.

Speaker #3: Moving on to slide number 13. And on the culinary business, which I said is a mix of tomato ketchups and mayo business. This business is fairly distributed in both retail and B2B side.

Speaker #3: We are seeing very strong growth in B2B, which is helping us expand this business further. But of course, our B2C business is also growing.

Speaker #3: So, the combination of strong B2B growth and specific high-intensity channels, like e-commerce and modern trade in retail, are helping us drive very strong growth in this business.

Nitish Bajaj: Combination of B2B strong growths and specific high-intensity channels like e-commerce, modern trade in the retail are helping us drive very strong growth in this business. We are also seeing exports growing on back of some key accounts we have in Southeast Asia, which is helping us grow. Overall, this business remains a high investment focus because we do see opportunities to drive growth on the rising consumption of Western foods in the country, as also on the back of very strong distribution footprint opportunity we have in this business. Moving on to slide 14, on our Italian business, mix of olive oils, pasta, and ready-to-eat olives. That business is growing both in volume and value terms at 15% growth in volume and 8% growth in value.

Speaker #3: We are also seeing exports growing on the back of some key accounts we have in Southeast Asia, which is helping us grow. So overall, this business remains a high-investment focus because we do see the opportunity to drive growth on the rising consumption of Western foods in the country, as well as on the back of a very strong distribution footprint opportunity we have in this business.

Speaker #3: Moving on to slide 14, on our Italian business: a mix of olive oils, pasta, and ready-to-eat olives. That business is growing both in volume and value terms, with 15% growth in volume and 8% growth in value.

Speaker #3: Olive oil, which is the hero product, is the core equity driver for this—this is where we are going to focus. We have started with high investment and are only going to increase the net present value of investment in the period ahead.

Nitish Bajaj: Olive oil, which is the hero product, which is the core equity driver for this, which is where we have started high investment and are only going to up the ante of investment in the period ahead, has seen very sharp growth of close to 20% in volume terms, driven by even stronger growth in e-commerce channel, where we are increasing our investment by. This is of course a category where we will drive both from consumer saliency and channel saliency point of view in the journey ahead. Similarly, pasta business is again growing by 10% with strong growth in e-commerce and food service channel. Moving on to slide 15 on our e-commerce business. This is the highest growth area for us from a channel point of view. We have significantly shifted the focus of organization to invest ahead of curve in this channel.

Speaker #3: Has seen very sharp growth of close to 20% in volume terms, driven by even stronger growth in the e-commerce channel, where we are increasing our investment.

Speaker #3: But this is, of course, a category where we will drive both from consumer saliency and channel saliency point of view in the journey ahead.

Speaker #3: Similarly, the pasta business is again growing by 10%, with strong growth in e-commerce and the food service channel. Moving on to slide 15, on our e-commerce business.

Speaker #3: This is the highest growth area for us from a channel point of view. We have significantly shifted the focus of the organization to invest ahead of the curve in this channel.

Speaker #3: We are also using this channel to drive our innovation or certain new category entries, and that combination of investment plus innovation-led growth is helping us deliver 32% growth in this channel.

Nitish Bajaj: We are also using this channel to drive our innovation, our certain new category entries, and that combination of investment plus innovation-led growth is helping us to deliver 32% growth in this channel. Very strong growth we have always talked about in quick commerce channel, which was historically also driven with the expansion of quick commerce in the country. Very happy to also share that hybrid platforms have also started to grow strongly for us in this area. More importantly, some of the new categories which we started investing on in the last 1 year, now we are seeing that business growing 3 to 4x of that nature as we invest to gain shares in those categories. Of course, we are still very small players and that's why the growth today is looking aggressive.

Speaker #3: Very strong growth—we have always talked about it in the quick commerce channel, which was historically also driven by the expansion of quick commerce in the country.

Speaker #3: But very happy to also share that hybrid platforms have also started to grow strongly for us in this area. More importantly, some of the new categories which we started investing in over the last one year.

Speaker #3: Now we are seeing that business growing three to four times as we invest to gain share in those categories. Of course, we are still very small players, and that's why the growth today looks aggressive.

Speaker #3: But as we build the base, the absolute quantum of increase on that business is also looking very promising. Overall, our spends—brand spends, and I would want to nuance it for you among slide 16—have grown from last quarter by 49%.

Nitish Bajaj: As we build the base, the absolute quantum of increase on that business is also looking very promising. Overall, our brand spend, and I would want to nuance it for you, I'm on slide 16, has grown from last quarter at about 49%. You would be well aware, and many companies in our ecosystem have talked about reclassification of spends, which is linked to how the trade visibility spends, which we will do in modern trade were accounted for. They were typically being included in marketing spends. Now, as per the new guidelines, we are reflecting them as trade spends, so they are being netted off from the sales. As an outcome of this, we do see a sharper growth visible over Q4.

Speaker #3: You would be well aware, and many companies in our ecosystem have talked about the reclassification of spends, which is linked to how the trade visibility spends that we would do in modern trade were accounted for.

Speaker #3: They were typically being included in marketing spends. Now, as per the new guidelines, we are reflecting them as trade spends. So, they are being let off from the sales.

Speaker #3: So, as an outcome of this, we do see a sharper growth visible over quarter four. But if I do a like-to-like comparison, our spends are growing at about 12% versus quarter four and are about 5% lower versus quarter one last year.

Nitish Bajaj: If I do like-to-like comparison, our spends are growing at about 12% versus Q4 and are about 5% lower versus Q1 last year. To nuance it from a definition of 5% lower versus Q1 last year, we had, as I said, gone into investment journey in Sundrop from Q4 of FY25 and in Del Monte from Q1 of FY26. At that phase, anyway, we had significantly upped our investment. As we have understood the various investment initiatives, today we are in a very strong position to do ROI-centric marketing investments, which is what is the overall thesis on which we will drive the growth of this business. Moving on to slide 17, our automation of sales force, which was very critical tool for our productivity of sales organization. That project had worked well.

Speaker #3: To nuance it from a definition of 5% lower versus quarter one last year, we had, as I said, gone into the investment journey in Sundrop from quarter four of FY25 and in Del Monte from quarter one of FY26.

Speaker #3: So at that phase, anyway, we had to significantly up our investment. As we have understood the various investment initiatives, today we are in a very strong position to do ROI-centric marketing investments, which is the overall thesis on which we will drive the growth of this business.

Speaker #3: Moving on to Slide 17—our automation of Salesforce, which was a very critical tool for the productivity of our sales organization. That project had worked well.

Speaker #3: I had talked about us reaching the point where we have the larger retail universe of Sundrop on the platform being achieved in Q4.

Nitish Bajaj: I had talked about us reaching the point where we have the larger retail universe of Sundrop on the platform, being achieved in Q4. That, of course, has continued. In addition to that, we are now seeing significant fraction of entire billing history generation, data generation of our outlet sales coming through this platform. Roughly about 80% of our outlets are today getting billed on this platform. End of last quarter, this number was about 75%. This will, of course, be a very strong initiative for us to optimize our coverage costs for the organization or the platform put together, as also drive productivity improvement initiatives in the channel ahead. On the margin improvement side, I'm on slide 18. We of course have seen very, very highly inflationary environment.

Speaker #3: So that, of course, has continued. But in addition to that, we are now seeing significant traction in entire billing history generation and data generation of our outlet sales coming through this platform.

Speaker #3: So, roughly about 80% of our outlets are today getting billed on this platform. At the end of last quarter, this number was about 75%. This will, of course, be a very strong initiative for us to optimize our coverage costs for the organization or the platform put together, as well as drive productivity improvement initiatives.

Speaker #3: In the channel ahead, on the margin improvement side—I'm on slide 18—we, of course, have seen a very, very highly inflationary environment. Despite that environment, we have been able to continue and sustain our initiatives where we had led improvements in our pack math, manufacturing, and logistics costs.

Nitish Bajaj: Despite that environment, we have been able to continue and sustain our initiatives where we had led improvements in our TacMac manufacturing and logistics costs. Overall, on the material side, despite inflationary environment, we have seen 40 basis point improvement versus last year, where we had seen significant improvements of the nature of 200 to 300 basis points. On other expenses, also seen another 70 basis reduction in margins, and that is translating to about 110 basis points improvement in our overall margin. Moving on to slide 19. Innovation, we have talked about, has been now central to our growth thesis. We have been expanding our innovation portfolio over last 12 to 18 months.

Speaker #3: So overall, on the material side, despite an inflationary environment, we have seen a 40 basis point improvement versus last year, where we had seen significant improvements on the order of 200 to 300 basis points.

Speaker #3: And on other expenses, we've also seen another 70 basis points reduction in margins. And that is translating to about 110 basis points improvement in our overall margin.

Speaker #3: Moving on to slide number 19—innovation. We have talked about how this has now become central to our growth thesis. We have been expanding our innovation portfolio over the last 12 to 18 months.

Speaker #3: And if I look at what we have launched in the last 24 months, we have launched close to 100 products, and we are getting about 4% of our overall sales through this portfolio.

Nitish Bajaj: If I look at now what we have launched in last 24 months, we have launched close to 100 products, and we are getting about 4% of our overall sales through this portfolio. If I also talk about sequentially how it has built up, in Q1, sitting at about 6% of our overall sales. Hence, we are seeing increased traction. We would want roughly about 6% to 8% of our growth, which is, let's say, 40% of our growth ambition, if we have to talk about growth of mid-teens or higher, to be funded out of innovation. That journey is shaping up very strongly. Moving on to slide 20. The entire consolidated P&L statement. As I talked about it, growth of top line 15%, material side, we have grown a shade lower, and hence material side efficiency has improved by about 40 basis points.

Speaker #3: If I also talk about sequentially how it has built up, in Q1, sitting at about 6% of our overall sales, and hence we are seeing increased traction.

Speaker #3: We would want roughly about 6% to 8% of our growth, which is, let's say, 40% of our growth ambition, if we have to talk about growth of mid-teams or higher.

Speaker #3: To be funded out of innovation. And that journey is shaping up very strongly. Moving on to slide 20, the entire consolidated P&L statement. As I talked about it, growth of topline 15%. Material side, we have grown a shade lower, and hence material side efficiency has improved by about 40 basis points.

Speaker #3: Our cost-side controls are stronger, which is what is helping us improve our margins further. ANP, as I talked about, looks about 12% lower here.

Nitish Bajaj: Our cost side controls are stronger, which is what is helping us improve our margins further. A&P, as I talked about, looks about 12% lower here, but in real terms, this should be about 5% lower. More importantly, I think we need to keep in mind that we are today doing 5% to 6% of our top line being invested on media and promotion. If I look at core portfolio where we invest, that number now actually, because 60% of our business is core where we invest, that number translates close to about 8% of our investment going in advertising and promotion. That we are going to maintain or build as we go along in this journey. As an outcome of this, our EBITDA has improved sharply, grown strongly versus last year, and we are sustaining the 7% EBITDA levels.

Speaker #3: But in real time, this will be about 5% lower. More importantly, I think we need to keep in mind that we are today doing 5% to 6% of our top line.

Speaker #3: Being invested in media and promotion—if I look at the core portfolio where we invest, that number now actually becomes 60% of our business is core, where we invest.

Speaker #3: That number translates to about 8% of our investments going into advertising and promotion, and that's something we are going to maintain or build upon as we go along in this journey.

Speaker #3: As a result of this, our EBITDA has improved sharply and grown strongly versus last year. We are sustaining the 7% EBITDA levels, and these are, of course, normalized net of ESOP costs.

Nitish Bajaj: These are, of course, normalized net of ESOP costs, which we have shared always in the past. Net of ESOP, we have sustained the numbers of about 7% of top line. Moving on to slide 21. I am just summing for all of us why Sundrop Brand is a very strong portfolio to look at. We do have a portfolio of stable, well-known brands which cater to the needs of evolving Indian consumer, who is getting more affluent, who is getting more open to Western food choices. We do, as a platform, ride on all consumer mega trends, whether it is increasing consumption of out-of-home, whether it is increasing exploration of new food choices. Of course, our categories are sitting in areas where penetration continues to be a strong driver of growth. These categories also offer significant, at least stronger margin versus commodity side.

Speaker #3: Which we have always shared in the past. So, net of ESOP, we have sustained the numbers at about 7% of the top line. Moving on to slide 21, I'm just summing up for all of us.

Speaker #3: Why is Sundrop Brands a very strong portfolio to look at? We have a portfolio of stable, well-known brands that cater to the needs of the evolving Indian consumer, who is becoming more affluent and more open to Western food choices.

Speaker #3: We do, as a platform, rise on all consumer mega trends—whether it is increasing consumption out-of-home, whether it is increasing exploration of new food choices, and, of course, our categories are sitting in areas where penetration continues to be a strong driver of growth.

Speaker #3: These categories also offer significantly stronger margins versus the commodity side. And in some of them today, we have a leadership position; in some, we have a challenger position.

Nitish Bajaj: In some of them today we have leadership position, in some we have a challenger position. Overall, given the context of penetration, growing growth of category, and a share gain opportunity, we do have a very significant headroom for sustainable growth in these businesses. We would continue to deliver that through investing, making the right choices on portfolio, which we have already done, but also right choices on investment vehicles, which we have sharply understood over last one and a half years of journey. That will ensure that our growth always remains more capital efficient. Last two points on this. There is still complementarity on channel and manufacturing strengths. We have started to make some moves in this direction, but there is significant headroom.

Speaker #3: But overall, given the context of penetration, ongoing growth of the category, and a share gain opportunity, we do have very significant headroom for sustainable growth in these businesses.

Speaker #3: We would continue to deliver that through investing, making the right choices on portfolio, which we have already done, but also the right choices on investment vehicles, which we have sharply understood over the last one and a half years of our journey.

Speaker #3: And that will ensure that our growth always remains more capital efficient. Last two points on this: there is still complementarity on channel and manufacturing strengths.

Speaker #3: We have started to make some moves in this direction, but there is significant headroom. Over the next one to one and a half years of our journey, you will see that also panning out to drive better improvements in margins and, of course, continuing to strengthen our growth momentum.

Nitish Bajaj: Over next one and a half years of journey, you will see that also panning out to drive better improvements in margins and also, of course, continuing or strengthening our growth momentum. That's all from my side. I would like to now close the session from presentation point of view and open it for Q&A. Thank you so much.

Speaker #3: So that's all from my side. I would now like to close the session from a presentation point of view and open it up for Q&A. Thank you so much.

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

Operator: Thank you very much, sir. We will now begin 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 withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Navin from iThought PMS. Please go ahead.

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

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Naveen from I Thought PMS.

Speaker #1: Please go ahead.

Speaker #3: Yeah, good morning, sir. Am I audible?

[Analyst] (iThought PMS): Yeah. Good morning, sir. Am I audible?

Navin Koushik: Yeah. Good morning, sir. Am I audible?

Speaker #2: Yes.

Speaker #1: Yes, please go ahead.

Operator: Yes, please go ahead.

Speaker #3: Yeah, congratulations on a good set of numbers. So, first question is going to be on ANP spends, right? So, sequential increase, year-over-year dip.

[Analyst] (iThought PMS): Yeah. Congratulations on a good set of numbers. First question is going to be on A&P spend. Sequential increase, year-over-year dip. A little bit more on just two things about this. One, have you become inherently a lot more efficient with our marketing or have you changed area of focus from maybe a particular brand or a particular segment to another? Has cost kind of just changed comparatively? Just a little more on this, please.

Navin Koushik: Yeah. Congratulations on a good set of numbers. First question is going to be on A&P spend. Sequential increase, year-over-year dip. A little bit more on just two things about this. One, have you become inherently a lot more efficient with our marketing or have you changed area of focus from maybe a particular brand or a particular segment to another? Has cost kind of just changed comparatively? Just a little more on this, please.

Speaker #3: So, a little bit more on just two things about this, right? So, one, have we become inherently a lot more efficient with our marketing?

Speaker #3: Or have we changed area of focus from maybe a particular brand or a particular segment to another? Does cost kind of change comparatively?

Speaker #3: Just a little more on this, please.

Speaker #2: Sure. Thank you, Naveen. So I'll just nuance it a little more for you. See, we started the investment journey on the portfolio, both in Sundrop and Del Monte.

Nitish Bajaj: Sure. Thank you, Navin. I'll just nuance it a little more for you. We started the investment journey on portfolio, both in Sundrop and Del Monte, in Q4 of FY25 and Q1 of FY26 respectively. When we got into, we took calls on certain categories to invest. Largely, our focus has remained on those categories. Having said that, we did, for example, take an investment call on juice's portfolio in Q1 of last year. We are saying it is not so core. We have not seen good results, we are dropping that call. Fundamentally, whatever we have called as a core portfolio in Sundrop, there we continue to invest. In Sundrop Brands as a business, we have only expanded our investment in Q1. If I talk the same in the context of Del Monte, we started with certain categories.

Speaker #2: In Q4 of FY25 and Q1 of FY26, respectively. And when we got into it, we took calls on certain categories to invest. Largely, our focus has remained on those categories.

Speaker #2: But having said that, we did, for example, take an investment call on the juices portfolio in Q1 of last year. We are saying it is not so core.

Speaker #2: We have not seen good results, so we are dropping that call. But fundamentally, whatever we have called as the core portfolio in Sundrop, there we continue to invest.

Speaker #2: And in Sundrop Brands as a business, we have only expanded our investment in Q1. If I talk about the same in the context of Del Monte, we started with certain categories.

Speaker #2: We have only taken a call not to invest in the fruit juices business. Net-net, where I also qualified by saying, while you see a 12% decline, if I take the impact of reclassification of trade spends, it's actually 21 versus 21.4 versus 22.9, which is just about a 5% decline.

Nitish Bajaj: We have only taken a call what to invest in fruit juices business. Net-net, where I also qualified by saying while you see a 12% decline, if I take the impact of reclassification of trade spends, it's actually 21.4 versus 22.9, which is just about a 5% decline. That is just the optimization. Overall, I think the confidence we need to have is investing in portfolio remains a key thesis for our growth. As a management, we'll continue to do it. We did have some learning, and these are very smaller set of optimizations which have been done in one specific portfolio. The core categories which we have been talking for last 1 year have remained strong on investment, and they will continue to be strong on investment.

Speaker #2: And that is just the optimization overall. I think the confidence you need to have is, investing in portfolio remains a key piece for our growth.

Speaker #2: And as a management, we'll continue to do it. We did have some learnings, and these are a very small set of optimizations which have been done in one specific portfolio.

Speaker #2: The core categories which we have been talking about for the last one year have remained strong on investment, and they will continue to be strong on investment.

Speaker #3: Got it, sir. That's very clear. Just a couple more questions. One question would be top con, right? So with ready-to-eat specifically, we're entering categories like cheese and popcorn, where, admittedly, a brand like 4700BC has been thriving so far.

[Analyst] (iThought PMS): Got it, sir. That's very clear. Just a couple more questions. One question would be like popcorn, right? With ready-to-eat specifically, we're entering categories like cheese and popcorn where admittedly a brand like 4700BC has been thriving so far. Could you just help me understand post the acquisition of that brand by a bigger company, are you seeing some more aggression on ground? Are you seeing more distribution in GT? Would you like to highlight any difference between our active offerings and those offerings that have been very successful for them?

Navin Koushik: Got it, sir. That's very clear. Just a couple more questions. One question would be like popcorn, right? With ready-to-eat specifically, we're entering categories like cheese and popcorn where admittedly a brand like 4700BC has been thriving so far. Could you just help me understand post the acquisition of that brand by a bigger company, are you seeing some more aggression on ground? Are you seeing more distribution in GT? Would you like to highlight any difference between our active offerings and those offerings that have been very successful for them?

Speaker #3: So, could you just help me understand, post the acquisition of that brand by a bigger company, are you seeing some more aggression on the ground?

Speaker #3: Are you seeing more distribution in GT? Would you like to highlight any differences between our ACT 2 offerings and those offerings that have been very successful for them?

Speaker #2: Yes, sir. So we constantly review portfolio evaluations. See, we are a category leader in the popcorn business. We constantly monitor how the portfolio has been evolving.

Nitish Bajaj: Yeah. We constantly review portfolio evolution. We are a category leader in popcorn business. We constantly monitor how the portfolio has been evolving. Of course, as more players come in category, you see greater dynamics of innovation and investment, which in general I would believe is good for the category. We today would hold closer to 85% share of the category. We are a very strong dominant market leader. We haven't yet seen any significant shift from the way category was operating pre-acquisition of 4700BC by a large player. From our context, we have, of course, significantly upped the investment, and we have understood which are the choices in portfolio which we could ride on and expand our share further and, of course, continue to grow. Sweet popcorn, I talked about it.

Speaker #2: And of course, as more players come into the category, you see greater dynamics of innovation and investment, which, in general, I would believe is good for the category.

Speaker #2: We today hold close to 85% share of the category, so we are a very strong, dominant market leader. We haven't yet seen any significant shift from the way the category was operating pre-acquisition of 4700BC by a large player.

Speaker #2: From our context, we have, of course, significantly upped the investment. And we have understood which are the choices in the portfolio that we could ride on and expand our share further.

Speaker #2: And, of course, continue to grow. So, sweet popcorn—I talked about it—we did see that we have an opportunity to be a stronger share or a bigger share.

Nitish Bajaj: We did see that we have an opportunity to be stronger share or bigger share, that is what we have picked up and starting to focus or invest behind. Cheese popcorn in some pockets, we saw that's a flavor which, let's say, we were not really leveraging in e-commerce channel, so we brought that also into e-commerce portfolio so as to expand our growth. These are, I would still say, constant innovation, constant new opportunity of growth, either by doing category-first initiatives or also some initiatives which will help us drive share gain.

Speaker #2: And that is what we have picked up, and started to focus on investing behind. Cheese popcorn, in some pockets, we saw that's a flavor which, let's say, we were not really leveraging in e-commerce channels.

Speaker #2: So we brought that also into our e-commerce portfolio to help expand our growth. So these are, I would still say, examples of constant innovation and constant new opportunities for growth, either by doing category-first initiatives or by taking initiatives that will help us drive share gain.

Speaker #3: Got it, sir. Just two small things.

[Analyst] (iThought PMS): Got it, sir. Just two small-

Navin Koushik: Got it, sir. Just two small-

Speaker #1: Sorry to interrupt, Mr. Naveen. May I please request you to rejoin the queue, sir, for the follow-up. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please limit yourselves to two questions only.

Operator: Sorry to interrupt, Mr. Naveen. May we please request you to rejoin the queue, sir, for the follow-up. Thank you.

Operator: Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please limit yourselves to two questions only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Pritesh Chheda from Lucky Investments. Please go ahead.

Speaker #1: Should you have a follow-up question, please rejoin the queue. Next question is from the line of Pritesh Chidha from Lucky Investments. Please go ahead.

Speaker #4: Yeah, hello, sir. How are you? Could you call out the volume and value growth of core and non-core as blended core and blended non-core?

Pritesh Chheda: Hello, sir. How are you? Could you call out the volume and value growth of core and non-core as blended core and blended non-core? What will be the volume and value growth?

Speaker #4: What would be the volume and value growth?

Speaker #2: Yes, sir. So, see, overall, if I look at it, we have talked about 60% of our portfolio being core, and that is growing at about 14 to 15 percent in value terms.

Nitish Bajaj: Overall, if I look at, we have talked about 60% of our portfolio is core-

Pritesh Chheda: Right

Nitish Bajaj: That is growing at about 14% to 15% in value terms and about 9% to 10% in volume terms.

Speaker #2: And about 9 to 10 percent in volume terms. In the non-core, there is oils, which is growing a shade faster in value at about 16 percent.

Pritesh Chheda: Okay.

Nitish Bajaj: In the non-core is oils, which is growing a shade faster in value at about 16%. Volume is about 7%. In the non-core, outside of oil, and edible oil is about 20% of our business. Contour wise, you would see that 80% of our business today is growing at about 15% to 16% on value and about 8% to 9% in volume. Balance of the business, which is another 20% of our business, is seeing a very similar or homogeneous growth because we are seeing our CP manufacturing business also seeing good volume traction. We do make energy drinks for certain companies. We are seeing good volume traction in that business. Blended, that business put together is still continuing to grow at about 15 odd percent in value and about 8% in volume.

Speaker #2: Volume is about 7. And then, in the non-core, outside of oil—and oil is about 20% of our business. Edible oil is about 20%.

Speaker #2: So, contour-wise, you would see that 80% of our business today is growing at about 15% to 16% on value, and about 8% to 9% in volume.

Speaker #2: The balance of the business, which is another 20% of our business, is seeing very similar or homogeneous growth because we are seeing our CP manufacturing business also experiencing good volume traction.

Speaker #2: We do make energy drinks for certain companies. We have seen good volume traction in that business. So, blending that business together, it is still continuing to grow at about 15-odd percent in value.

Speaker #2: And about 8% in volume. But in the core portfolio where we invest, I would say our growth is 9% to 10% in volume, and 15% in value.

Nitish Bajaj: core portfolio where we invest, I would say our growth is 9% to 10% in volume and 15% in value.

Speaker #4: Okay. My second question is around your key pillars—if you could call out the key pillars of your growth strategy, not at the brand level, but generally at the overall level—and what will it lead or translate into: value and volume growth for the core categories?

Pritesh Chheda: Okay. My second question is, if you could call out the key pillars of your growth strategy, not at the brand level but generally at the overall level, and what will it lead or translate into value and volume growth for the core categories?

Speaker #2: Okay, so in the key categories where we invest in—one, popcorn; ketchup; mayo; and let's say Italian—I'll first talk about popcorn, ketchup, and mayo.

Nitish Bajaj: Okay. In the key categories where we invest in popcorn, ketchup, mayo, and let's say Italian. I'll first talk about popcorn, ketchup, and mayo. There I would say there are three key pillars for growth. First is, of course, distribution expansion, because categories have opportunity to either gain share by category penetration expansion, like popcorn, or gain share by distribution expansion, which is mayo, and ketchup. Second area is, of course, investment, because as you want to either gain share or we want new consumers to come in, your media investment needs to go up. We are going to invest ahead of curve on these categories. Third area, specifically for these categories, will be in the area of innovation or new products through which we can do certain share gain strategies.

Speaker #2: There, I would say there are three key pillars for growth. First is, of course, distribution expansion, because categories have the opportunity to either gain share by category penetration expansion—like popcorn—or gain share by distribution expansion, which is mayo and ketchup.

Speaker #2: The second area is, of course, investment, because as you want to either gain share or you want new consumers to come in, your media investment needs to go up.

Speaker #2: So, we are going to invest ahead of the curve on these categories. The third area, specifically for these categories, will be in the area of innovation or new products, through which we can implement certain share gain strategies.

Speaker #2: Coming to Italian business and Italian business, I would say it is still a more top-down model and new channels like e-commerce are the focus. There, the growth will be driven not so much by distribution, but more by innovation and investments.

Nitish Bajaj: Coming to Italian business, Italian business, I would say, is still more top-down, metro, and new channel like e-commerce focused. There the growth will be driven not so much by distribution, but more by innovation and investments. On peanut butter, again, I would say innovation is something which will be very central to drive growth for us, because we had a catch-up to do. We have already done the catch-up, we will also want to do certain innovations to drive stronger growth and share recovery in that business.

Speaker #2: And on peanut butter, again, I would say innovation is something that will be very central to driving growth for us, because we had some catching up to do.

Speaker #2: We have already done the catch-up, but we also want to pursue certain innovations to drive stronger growth and share recovery in that business.

Speaker #4: What will lead to value and volume growth for core categories? Will we see improvement in volume from what you are doing or from what you're recording today?

Pritesh Chheda: What will it lead to value and volume growth for core categories? Will we see improvement from what you are doing or what you're recording today in volume?

Speaker #2: So, see, volume growth intrinsically—if you look at it—in most categories, we are seeing 4% to 5% volume growth. We are today already ahead of the curve in volume growth, which means we are able to gain some share in most categories.

Nitish Bajaj: Volume growth, intrinsically, if you look at in most categories, we are seeing 4% to 5% volume growth. We are today already ahead of curve in the volume growth, which means we are able to gain some share in most categories. Of course, popcorn by category, we are the ones who define category. Outside of that, I would think sustaining 10% kind of volume growth is what we would really pivot towards. Value growth, we would want to add another, let's say, 4% to 5%, and innovation-led growth could be another 4% to 5%. In a longer term, if I can go to high teens growth, it's something we would aspire for, and broader mix will be 50% through volume, 25% through price, and 25% through innovation.

Speaker #2: Of course, popcorn-like category, we are the ones who define the category. But outside of that, I would think sustaining 10% kind of volume growth is what we would really pivot towards.

Speaker #2: And value growth, we would want to add another, let's say, 4% to 5%. And innovation-led growth could be another 4% to 5%. So in the longer term, if I can go to high-teens growth, it's something we would aspire for.

Speaker #2: And the broader mix will be 50 percent through volume, 25 percent through price, and 25 percent through innovation.

Speaker #4: 50 volume, 25 percent price.

Pritesh Chheda: 50 volume, 25% price-

Speaker #1: Sorry to interrupt, Mr. Chidha, but I have a basic question before I rejoin the queue.

Operator: Sorry to interrupt, Mr. Chheda. We have a second investor who joined the queue.

Speaker #2: Sorry, Pritesh, when I said 25 percent, I'm talking about mid-25 percent of mid-teams growth to high-teams growth. So, yeah.

Nitish Bajaj: Sorry, Pritesh, when I said 25%, I'm talking about mid 25% of mid-teen growth to high-teen growth.

Pritesh Chheda: Yeah.

Nitish Bajaj: Yeah.

Speaker #4: Yeah, I got it, sir. Thank you very much. Thank you, all the best.

Pritesh Chheda: Yeah. I got it, sir. Thank you very much. Thank you. All the best.

Speaker #2: Yeah. Thank you.

Nitish Bajaj: Yeah. Thank you.

Speaker #1: Thank you. Next question is from the line of Balaji Vaidyanathan from NAFA Asset Management. Please go ahead.

Operator: Thank you. Next question is from the line of Balaji Vaidyanathan from NAFA Asset Managers. Please go ahead.

Speaker #2: Good morning. Thanks for the opportunity. I have a couple of questions. One is on the Italian portfolio. It seems like we’ve had a fall in realization to the tune of 6% to 10%.

Balaji Vaidyanathan: Good morning. Thanks for the opportunity. A couple of questions. One is on the Italian portfolio. It seems like you've had a fall in realization to the tune of 6% to 10%. Is it fair to assume that it's some kind of quick commerce discounting that they're doing on this portfolio?

Balaji Vaidyanath: Good morning. Thanks for the opportunity. A couple of questions. One is on the Italian portfolio. It seems like you've had a fall in realization to the tune of 6% to 10%. Is it fair to assume that it's some kind of quick commerce discounting that they're doing on this portfolio?

Speaker #2: Is it fair to assume that it's some kind of quick commerce discounting that we are doing on this portfolio? Sorry, I couldn't understand. Which portfolio did you mention?

Nitish Bajaj: Sorry, I couldn't understand. Which portfolio did you mean?

Speaker #2: Italian portfolio. Italian. Abhinav, do you want to answer this?

Balaji Vaidyanathan: Italian.

Balaji Vaidyanath: Italian.

Nitish Bajaj: Italian portfolio.

Balaji Vaidyanathan: Italian.

Balaji Vaidyanath: Italian.

Balaji Vaidyanathan: Abhinav, you want to answer this?

Nitish Bajaj: Abhinav, you want to answer this?

Speaker #4: Hi, good afternoon. This is Abhinav. So, see, if you look at the Italian portfolio—Nitish talked about it during his presentation—if you look at the entire last year, we've been in a commodity deflation cycle.

Abhinav Kapoor: Hi. Good afternoon. This is Abhinav. See, if you look at the Italian portfolio, Nitish talked about it during his presentation. If you look at the entire of last year, we've been in a commodity deflation cycle. Essentially, when we buy it, we've been buying it at lower pricing, which we have passed on to the end consumer. Basis that, while we did see volume growth, we did see a value decline last year. Now, this year, for example, with the growth, I would say the price is stabilizing in the market. We have now started to see a value increase, which is coming through. Last year, Q1, the price pass-out only started from, I would say, Q2 onwards. Q1, we were still running on higher inventories at the old pricing. That is the change that you're seeing right now.

Speaker #4: So essentially, when we buy it, we've been buying it at lower pricing, which we have passed on to the end consumer. And based on that, while we did see volume growth, we did see a value decline last year.

Speaker #4: Now, this year, for example, with the growth, I would say the price is stabilizing in the market. We have now started to see a value increase, which is coming through.

Speaker #4: But last year, quarter one, the price pass-out only started from, I would say, quarter two onwards. Quarter one, we were still running on higher inventories with the old pricing.

Speaker #4: So that is the change that you're seeing right now. This will stabilize going onwards from Q2. So currently, there is no significant—

Abhinav Kapoor: This will stabilize going onwards from Q2.

Speaker #2: So it's not any mass-scale, quick-commerce discounting, correct?

Balaji Vaidyanathan: It's not any mass-level quick commerce discounting, correct?

Balaji Vaidyanath: It's not any mass-level quick commerce discounting, correct?

Speaker #4: No.

Abhinav Kapoor: No.

Speaker #2: Okay. Sorry, ma'am. My second question is, we have seen that B2B is roughly growing at about 18 percent, and e-commerce is around 32-odd percent.

Balaji Vaidyanathan: Okay. Fair enough. My second question is, we've seen that B2B is roughly growing at about 18%, e-commerce is around 30-odd%. Is it fair to assume that the GT/MT number is probably low single digits in terms of growth?

Balaji Vaidyanath: Okay. Fair enough. My second question is, we've seen that B2B is roughly growing at about 18%, e-commerce is around 30-odd%. Is it fair to assume that the GT/MT number is probably low single digits in terms of growth?

Speaker #2: So is it fair to assume that the GTMP number is probably low single digits, in terms of growth? Are you talking for Del Monte specifically, or overall business?

Nitish Bajaj: You're talking for Del Monte specifically, overall?

Speaker #2: Overall portfolio, sir. Overall. Overall business. So, see, if we have shown you the flavor of various categories, right now, popcorn is a dominantly retail business.

Balaji Vaidyanathan: Overall portfolio, sir. Overall business.

Balaji Vaidyanath: Overall portfolio, sir. Overall business.

Nitish Bajaj: See, we have shown you the flavor of various categories, right? Now, popcorn is a dominantly retail business. We have actually no business of popcorn in B2B side. That we have said is growing at about 18%, it is dominantly a retail-led growth. Similarly, Italian business is again dominantly a B2C consumer retail business. That business, volume wise, is growing at about 15%. Again, a retail growth. Staples or oil is again a fully retail business for us, growing at 16% in value. Culinary is the only business which is a mix of retail and B2B. Yes, when you are saying we are saying the growth is around 18% to 20%, B2B growth would be sharper and retail growth would be a tad lower.

Speaker #2: We actually have no popcorn business in retail. On the B2B side, that segment, as we have said, is growing at about 18%. So, it is dominantly a retail-led growth.

Speaker #2: Similarly, Italian business is again dominantly a B2C consumer retail business. That business, volume-wise, is growing at about 15 percent—again, a retail growth. Culinary is a business—sorry, staples or oil—is again a fully retail business for us.

Speaker #2: Growing at 16 percent in value. Culinary is the only business which is a mix of retail and B2B. So yes, when you're saying we are seeing the growth is around 18 to 20 percent, B2B growth would be sharper.

Speaker #2: And retail growth would be a tad lower. But Max, it's very simple for you to say, if one is growing at 18%, the other may be growing at 10 to 12% in that range.

Nitish Bajaj: maths is very simple for you to say if one is growing at 18%, the other may be growing at a 10% to 12%, in that range.

Speaker #2: Got it. My last question is just a short one. In terms of this edible oil, this 15 percent growth that we have seen—how much of that is price inflation passed through?

Balaji Vaidyanathan: Got it. My last question is just a short one. In terms of this edible oil, this 15% growth that we have seen, how much of that is price inflation passing?

Balaji Vaidyanath: Got it. My last question is just a short one. In terms of this edible oil, this 15% growth that we have seen, how much of that is price inflation passing?

Speaker #4: Yeah.

Speaker #2: So, Balaji, you see that it shows we have a 7 percent volume growth and 16 percent value growth. So that's about 9 percent—that's the price that we have been able to pass, right?

Asheesh Kumar Sharma: Okay. Narayan Ji, you see that it shows we have a 7% volume growth and 16% value growth.

Nitish Bajaj: Correct.

Asheesh Kumar Sharma: That's about 9% is the price that we have been able to pass, right? What we normally look at in edible oil is we are trying to pass the per kg price increase in absolute terms, so that in the longer term, we manage the absolute profit margin that we make from our staple business. Percentage margin passing or price increase passing on in staple business is little more difficult because of the commoditized nature, right? We are slowly passing on. We passed on almost the entire per kg price increase in staples to the consumer, leading to a 9% price increase. We got still a volume growth of seven, taking the total to about 16% value growth.

Speaker #2: What we normally look at in edible oil is that we are trying to pass the per-kilogram price increase in absolute terms, so that in the longer term we manage the absolute profit margin that we make from our staple business.

Speaker #2: Percentage margin passing on a price increase in the staple business is a little more difficult because of the commoditized nature, right? So we are slowly passing it on.

Speaker #2: So, we passed on almost the entire per-kilogram price increase in staples to the consumer, leading to a 9% price increase. And we still got a volume growth of 7%, taking the total to about 16% value growth.

Speaker #2: Got it. Thank you so much, and I wish you all the best. Thank you.

Balaji Vaidyanathan: Got it. Thank you so much. Wish you all the best.

Balaji Vaidyanath: Got it. Thank you so much. Wish you all the best.

Asheesh Kumar Sharma: Thank you.

Speaker #1: Thank you. Next question is from the line of Siddhesh Deshmukh from IIFL Capital. Please go ahead.

Operator: Thank you. Next question is from the line of Siddhesh Deshmukh from IIFL Capital. Please go ahead.

Speaker #2: Hi, sir. This is Percy Panthi here. I just wanted to understand the situation regarding the merger of the two organizations—things like having common distributors for Del Monte and Sundrop, or merging the internal sales force, and so on.

Siddhesh Deshmukh: Hi, sir, this is Percy Pantaki here. I just wanted to understand the situation on the merger of the two organizations. Things like having common distributors for Del Monte and Sundrop, things like merging the internal sales force, and so on. What is the situation there? What are the kind of timelines, et cetera? When all this is finally completed, how many basis points of savings do you think that this can extract?

Percy Panthaki: Hi, sir, this is Percy Pantaki here. I just wanted to understand the situation on the merger of the two organizations. Things like having common distributors for Del Monte and Sundrop, things like merging the internal sales force, and so on. What is the situation there? What are the kind of timelines, et cetera? When all this is finally completed, how many basis points of savings do you think that this can extract?

Speaker #2: So, what is the situation there? What are the timelines, etc.? And when all of this is finally completed, how many basis points of savings do you think this can extract?

Speaker #2: Yeah. So, more broadly, we have been very cautious about it because we want to make sure that we do everything the right way.

Nitish Bajaj: Yeah. Broader picture, see, we have been very cautious about it because we want to make sure that we do everything the right way. Fundamentally, the only area of overlap, if I see strongly, is the general trade retail coverage. Modern trade is anyway account team structured, it is fine. E-commerce, again, is account team structured. We have already consolidated it under a single operation team. As we stand today, e-commerce, we are already operationally, while account managers could be different, but we have consolidated it under a single team. Fulfillment of channels still remains CFA-led. We have talked about the fact that CFAs, we are already on the journey of consolidating. Right now, Del Monte has 10 unique CFAs.

Speaker #2: Now, fundamentally, the only area of overlap, if I see strongly, is the general trade retail coverage. Modern trade is anyway account-team structured, so it is fine.

Speaker #2: E-commerce, again, is account team structured. We have already consolidated it under a single operations team. So as we stand today, e-commerce—we have already, operationally, while account managers could be different, but we have consolidated under a single team.

Speaker #2: Fulfillment of channels still remains CFA-led. We have talked about the fact that CFAs—we are already on the journey of consolidating. So, right now, Del Monte has 10 unique CFAs.

Speaker #2: About three of them, two are already consolidated. The third one is underway, and by the end of this year, we should be able to complete a larger—let's say, about eight CFA consolidations between Sundrop and Del Monte.

Nitish Bajaj: Two are already consolidated, third one is underway, by end of this year, we should be able to complete larger, let's say, about eight CFA consolidation between Sundrop and Del Monte. Only two unique CFAs will remain for Del Monte by the end of this year. That is already going on. Coming to your question on sales team. Now, sales team, only in the context of general trade, we need to do it via first the backbone, which we call as the ERP fulfillment of this thing. We are in the journey of ERP evaluation, very soon we'll also be thinking on how do we want to go about delivering ERP migration to a single set of ERP for two organizations. I would say that within next 12 months, we should be able to get to that stage.

Speaker #2: So, only two unique CFAs will remain for Del Monte by the end of this year, so that is already going on. Coming to your question on the sales team—

Speaker #2: Now, sales team, only in the context of general trade, we need to do it via, first, the backbone, which we call the ERP fulfillment listing.

Speaker #2: We are in the journey of ERP evaluation, and very soon, we'll also be thinking about how we want to go about delivering ERP migration to a single set of ERP for two organizations.

Speaker #2: After that, I would say that within the next 12 months, we should be able to get to that stage. Following this, we should also see how we can gradually bring the sales organization to be more cohesive.

Nitish Bajaj: Post that, we should also see how we can gradually bring the sales organization to be more cohesive. We have done one experiment already in East, where today for the entire East of the country, Del Monte business is being distributed through Sundrop team. Coming to your last point on what is the kind of value maximization or synergy benefits we see from this exercise, I would say about 200 basis point improvements could be seen from this exercise, but this could be delivered over a period of next 18 months.

Speaker #2: We have done one experiment already in the East, where today, for the entire East of the country, Del Monte business is being distributed through the Sundrop team.

Speaker #2: Coming to your last point on what is the kind of value maximization or synergy benefits we see from this exercise, I would say about 200 basis points improvement could be seen from this exercise.

Speaker #2: But this could be delivered over a period of the next 18 months.

Speaker #4: Okay. Got it. My second question is on the overall margin journey. If we have to move from, let's say, a 4 to 5 percent EBITDA margin to, let's say, a low double digit, let's say around a 12 percent kind of margin over the next let's say about 3 years or so, so that's about close to about 700 basis points kind of expansion.

Percy Pantaki: Okay, got it. My second question is on the overall margin journey. If we have to move from, let's say, a 4% to 5% EBITDA margin to, let's say, a low double digit, let's say around a 12% kind of margin over the next, let's say about three years or so. That's about close to about 700 basis points kind of expansion. 200 basis points can come from these measures that you spoke about. What would be the breakup of the remaining 500 basis points?

Percy Panthaki: Okay, got it. My second question is on the overall margin journey. If we have to move from, let's say, a 4% to 5% EBITDA margin to, let's say, a low double digit, let's say around a 12% kind of margin over the next, let's say about three years or so. That's about close to about 700 basis points kind of expansion. 200 basis points can come from these measures that you spoke about. What would be the breakup of the remaining 500 basis points?

Speaker #4: Two hundred basis points can come from these measures that you spoke about. What would be the breakup of the remaining five hundred basis points?

Speaker #2: Yes. So Percy, I'd just like to first clarify, as we stand today, our EBITDA margin is close to 7%. Of course, there is an ESOP, which we have not baked into those numbers.

Nitish Bajaj: Yes. Percy, I would just like to first clarify. As we stand today, our EBITDA margin is close to 7%. Of course, there is ESOP, which we have not baked into those numbers. If I was to bake in the ESOP numbers, that number will be close to 5.66%, in that range. We are a tad higher, I would say sharply higher also than 4%, which we used to be about an year and a half back. That's first thing.

Speaker #2: If I were to bake in the ESOP numbers, the number would be close to 5.66 percent, in that range. So, we are a tad higher—I would say sharply higher also—than 4 percent, which we used to be about a year and a half back.

Speaker #2: So that's the first thing. Now, the journey from 7 percent to 12 percent—ESOP is a front-loaded cost in the P&L. It will continue for about the next, I would say, 18 to 21 months at the level where it is.

Percy Pantaki: Sure.

Percy Panthaki: Sure.

Nitish Bajaj: Journey from 7% to 12%, ESOP is a front-loaded cost in the P&L. It will continue for about next, I would say 18 to 21 months at the level where it is. After that, the next two years, the ESOP cost will be marginal to the P&L, and hence, that in itself should see 100 basis points improvement in delivery, if I have to talk as non-ESOP-adjusted number. ESOP-adjusted number, I have already told you, is 7% as it stands today. Taking this 7% number, which we saw the adjusted number to 12%, about 200 basis points I said could come through how we leverage the synergy of operations alone. The balance is, of course, the growth momentum, value maximization through premiumization of portfolio.

Speaker #2: After that, for the next two years, the ESOP cost will be marginal to the P&L. And hence, that in itself is an improvement in delivery if I have to talk about a non-ESOP-adjusted number.

Speaker #2: ESOP adjusted number, I've already told you, is 7 percent as it stands today. Taking this 7 percent number which is ESOP adjusted number to 12 percent, about 200 basis points are said could come through how we leverage the synergy of operations alone.

Speaker #2: The balance is, of course, the growth momentum—value maximization through premiumization of the portfolio. Overall, our endeavor is to improve our margins by 300 basis points every year, of which we would want to deploy half back to the business and half back to the shareholders.

Nitish Bajaj: Overall, our endeavor is to improve our margins by 300 basis points every year, of which we would want to deploy half back to the business and half back to the shareholders. That's the broader thesis. When I say back to business, that is to ensure we sustain our growth momentums in mid-teens to high teens level. That will give us the scale benefit, margin expansion of another 100 odd basis points as we improve our scale and we leverage our assets better. This year, as we are talking about Q1, this is largely a scale benefit because cost side, we have talked about it has been an adverse cost environment. We have yet taken price increases to minimize the cost impact. In most areas, we were able to address the cost impact.

Speaker #2: That's the broader thesis. When I say "back to business," that is to ensure we sustain our growth momentum in the mid-teens to high-teens level. So that will give us the scale benefit and margin expansion of another 100-odd basis points as we improve our scale and leverage our assets better.

Speaker #2: This year, as we are talking about Q1, this is largely a scale benefit because, on the cost side, we have talked about it being an adverse cost environment.

Speaker #2: We have yet to take price increases to minimize the cost impact. In most areas, we were able to address the cost impact. In a few areas where we have contracts—mainly B2B business, etc.—we have been gradual, or, let's say, they haven't followed the curve of price increases.

Nitish Bajaj: In few areas where we have contracts, maybe B2B business, et cetera, we have been gradual or, let's say, we haven't followed the curve of price increases. They are, of course, a part of constant negotiations with accounts. Overall, one is we see strong strength in portfolio in terms of pricing power. That's one take out. As we build scale, we do see 100 basis points improvement every year coming through scale. As we improve premiumization, that could also yield another 80 to 100 basis points every year. Through synergy over next two years, we should get another 100 basis points every year. That's the way you should look at it for next two years horizon. Yeah.

Speaker #2: They have, of course, part of constant negotiation with accounts. So overall, one is we see strong strength in the portfolio in terms of pricing power.

Speaker #2: That's one takeaway. As we build scale, we do see a 100-basis-point improvement every year coming through scale. As we improve premiumization, that could also yield another 80 to 100 basis points every year.

Speaker #2: And through synergy over the next one year, next two years, we should get another 100 basis points every year. That's the way you should look at it for the next two-year horizon.

Speaker #2: Yeah.

Speaker #4: So if I just see 12 percent, is that a fair estimate?

Percy Pantaki: I find that 12% is fair estimate.

Percy Panthaki: I find that 12% is fair estimate.

Speaker #2: Yes, that is the number we would want to get to in three years' time from now. Yes.

Nitish Bajaj: Yes, that is the number we would want to get to in three years' time from now. Yes.

Speaker #4: Got it, sir. Got it. That's all from me. Thanks, and all the best.

Percy Pantaki: Got it, sir. That's all from me. Thanks and all the best.

Percy Panthaki: Got it, sir. That's all from me. Thanks and all the best.

Speaker #2: Okay.

Nitish Bajaj: Okay.

Speaker #4: Thank you. The next question is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.

Operator: Thank you. Next question is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.

Speaker #5: Hi, Nitish, Ashish. Good afternoon, and thank you for the opportunity. I’m quite impressed; the trajectory is improving. I was more curious about the Rs. 10 price point on popcorn RTC disruption.

Shirish Pardeshi [Head of Research: Hi, Nitish, Ashish. Good afternoon, thank you for the opportunity. I'm quite impressed the trajectory is improving. I was more curious with INR 10 price point on popcorn RTC disruption. The growth is looking better, how do you manage the supply chain and what is the contribution this INR 10 is going to give? Which are the markets which we have put this product? Similarly, in the e-commerce, what kind of RTC contribution we are getting?

Speaker #5: The growth is looking better. But how do you manage the supply chain, and what is the contribution this 10 rupees is going to give?

Speaker #5: Which are the markets where we have put this product? And similarly, in e-commerce, what kind of RTC contribution are we getting?

Speaker #2: Okay, thanks, Shirish. The same question: In the popcorn section, if we look at the RTC, which is the Autumn Fresh to be made at 10 rupees, we continue to expand geographically across the country and in all the regions.

Asheesh Kumar Sharma: Okay. Thanks, Shirish. The same was in the popcorn section. If you look at the RTC, which is the hot and fresh to be made, INR 10, we continue to expand geographically across the country in all the regions. We were already leading there with our INR 10 packs. That part continues. Our facilities, which are in Kashipur and Kotdwar, continue to produce more and more efficiently because we had headroom of capacity. As capacity utilization is increasing, that is adding to our profitability on the instant popcorn business. Coming to the ready to eat business, there the INR 10 expansion till about last year was predominantly in north. We expanded and have now made some inroads in east. West and south, we are working on it and gradually expanding. The key of a INR 10 product lies in two-folds.

Speaker #2: Right? Because we were already leading there with our 10-rupee packs, right? So that part continues. Our facilities, which are in Kashipur and Kotur, continue to produce more and more efficiently because we had headroom of capacity.

Speaker #2: And as capacity utilization is increasing, that is adding to our profitability in the instant popcorn business, right? Now, coming to the ready-to-cook or ready-to-eat business, the 10-rupee expansion until about last year was predominantly in the North.

Speaker #2: And so we expanded and have now made some inroads in the east, west, and south. We are working on it and gradually expanding. Now, the key often—10-rupee product—lies in two folds.

Speaker #2: You have to have assorted manufacturing, because the two biggest components of cost in bag snacks in 10 rupees, especially, are your packaging cost and your freight cost.

Asheesh Kumar Sharma: You have to have assorted manufacturing, two biggest components of cost in packed snacks in INR 10 is basically your packaging cost and your freight cost. Assorted manufacturing is ensuring that our freight costs are under control, as capacity utilization of those plant is increasing, it is becoming better and better in terms of margin. With assorted manufacturing, we are also able to optimize packaging costs we don't have to have a very long shelf life of our products. With a very efficient four-and-a-half to five-month shelf life, we are able to give fresh product in the market. The third, to build the supply chain efficiently, we use a model which is that we ship a large part of it to the customer or our distributors directly from our factory.

Speaker #2: Now, assorted manufacturing is ensuring that our freight costs are under control. And as capacity utilization of those plants is increasing, it is becoming better and better in terms of margin.

Speaker #2: Now, with the assorted manufacturing, we are also able to optimize packaging costs because we don't have to have a very, very long shelf life across.

Speaker #2: So, with a very efficient four-and-a-half to five-month shelf life, we are able to provide fresh product in the market. Third, to build the supply chain efficiently, we use a model in which we ship a large part of it to the customer or our distributors directly from our factory.

Speaker #2: So they receive as good as 4- or 5-day latest manufactured products, only for our bag snacks. Now, there are some distributors who are at a much smaller volume, which we continue to route through our CFA.

Asheesh Kumar Sharma: They receive as good as four- or five-day latest manufactured products, only for our packed snacks. There are some distributors who are at a much smaller volume, which we continue to route through our CFA. As the volume builds up, we move them to direct shipments. That is the third leg, which is adding efficiency in our INR 10 packs.

Speaker #2: But as the volume builds up, we move them to direct shipments. Now, that is the third leg, which is adding efficiency in our ₹10 packs.

Speaker #2: Yeah, and just to add one more lever to this entire thing, on the e-commerce side we are also seeing premiumization of bigger bag sizes driving the growth.

Nitish Bajaj: Yeah. Just to add one more lever to this entire thing. On e-commerce side, we are also seeing premiumization of bigger pack sizes driving the growth. While we are seeing retail being driven at a INR 10 price point, in e-commerce it is INR 25 to INR 50 price points which are driving the growth. Of late, our focus is, of course, on expanding towards 50 MRP packs. It's not only our focus, it is also the channel teams or account teams focus to drive greater growth towards 50 price point packs, and that is also helping us improve EBITDA. One very important thing which I would like to share is, historically, our ready to eat INR 10 was a dilutive to margin business. Over last 18 months, we have actually made it accretive to our margin business.

Speaker #2: So, while we are seeing retail being driven at a ₹10 price point, in e-commerce, it is ₹25 to ₹50 price points which are driving the growth.

Speaker #2: And of late, our focus is, of course, on expanding towards 50 MRP packs. It's not only our focus; it is also the channel teams' or account teams' focus to drive greater growth towards the 50 price point packs.

Speaker #2: And that is also helping us improve EBITDA. One very important thing which I would like to share is, historically, our ready-to-eat rupee 10 was a dilutive-to-margin business.

Speaker #2: But over the last 18 months, we have actually made it a creative to our margin business. So today, when we see the growth—and of course, it's very similar to the business profile now.

Nitish Bajaj: Today when we see the growth, and of course, it's very similar to the business profile now. Today our ready to eat INR 10 price point pack or ready to eat total portfolio, does not dilute our margin as it keeps going. It is actually being accretive in the very same dimension as our core business overall.

Speaker #2: But today, our ready-to-eat ₹10 price point pack, or the total ready-to-eat portfolio, does not dilute our margin as it keeps growing. It is actually being accretive, or in the very same dimension as our core business overall.

Speaker #3: Also, Shirish, if we take the third percent RTE growth, right, you will find that the bigger packs as we do, which is more than the ₹10 price point packs, are growing at 42%, and the other ones are growing probably at 33%.

Asheesh Kumar Sharma: Also, Shirish, if you look at the 35% RTE growth, you will find that the bigger packs, as we do, which is more than the INR 10 price point packs, are growing at 42, and the other ones are growing probably at 33. The better part is that e-commerce, which is larger, is now growing at almost 55%. The appearing bigger pack, more profitable ones, are growing faster than overall. Definitely, the expansion in GT is key to keep building saliency and make an unbeatable mode of distribution.

Speaker #3: The better part is that e-commerce, which is larger, is now growing at almost 55 percent. So, the apparently bigger packs—the more profitable ones—are growing faster than overall.

Speaker #3: But definitely, the expansion in GT is key to keep building saliency and to create an unbeatable moat of distribution.

Speaker #5: This is what I wanted to just check, just to follow up. If you're selling ₹100 popcorn—ready-to-cook, ready-to-eat—within that, what is the share of ₹10, and what is the share beyond that, say, ₹25 or ₹30?

Shirish Pardeshi [Head of Research: Is what I wanted to just check, just follow up. If you're selling INR 100 popcorn, ready to cook, ready to eat, in that, what is the share of INR 10 and what is the share of beyond that INR 25, INR 30? If I look at the e-commerce channel is also showing a lot of growth, and even this retail is also showing the growth. I'm saying, if Nitish is saying that his margin attractive, my only worry is that is in the medium term, is this margin is sustainable.

Speaker #5: Because if I look at the e-commerce channel, it is also showing a lot of growth. And even this retail is also showing growth. So I'm saying, if Nitish is saying that this margin is attractive, my only worry is that in the medium term, is this margin sustainable?

Speaker #2: So, I think this is—first of all, what Nitish talked about was the margin of the ₹10 also. That is also improving, right?

Asheesh Kumar Sharma: I think, Shirish, first of all, what Nitish talked about was the margin of the INR 10 also. That is also improving. The overall margin is what it has come where it is accretive now. In the accretive margin, the bigger pack. Today the ratio, last year, probably the ratio would have been one-third, two-thirds. It has probably moved to 64, 36 now, with a faster growing. Now, the bigger pack business is about one-third, two-thirds. Even if it is growing by, say, 10, 15 basis points faster, that ratio would change in only a 1% or 2% regularly. What is happening is the INR 10 profitability in absolute is also improving.

Speaker #2: But the overall margin is where it has become accretive now, right? In the accretive margin, the bigger packs—today the ratio, last year, probably the ratio would have been one-third, two-thirds.

Speaker #2: It has probably moved to 64-36 now, with the faster growing. Now, the bigger pack business is about one-third, two-thirds. So even if it is growing by, say, 10 or 15 basis points faster, the ratio would change only by one or two percent regularly.

Speaker #2: But what is happening is the ₹10 profitability in absolute terms is also improving.

Speaker #5: Yeah, and I think, see, in ready-to-eat, as Ashish said, our capacity utilizations are also rapidly improving. So, while we may have headwinds in the form of category commodity inflation or packaging cost inflation, which we witnessed last year, we haven't seen any impact of that in any way.

Nitish Bajaj: Yeah. I think, see, in ready-to-eat, as Ashish said, our capacity utilizations are also rapidly improving. While we may have headwinds in the form of category, commodity inflation or packaging cost inflation, which we witnessed last year, we haven't seen any impact of that in any way. Our margins are only today marginally ahead of what data is Q4, before this situation of packaging inflation came in. We have been able to tide over that impact without any kind of margin dilution because we have growth, capacity utilization, the way we manage distribution freight, the way our larger, bigger packs are growing. All of these are also helping us continuously keep a margin accretive position. I do not see this to be in mid-term becoming a loss leader. We do not really have a INR 5 portfolio.

Speaker #5: Our margins are only today marginally ahead of what they were in Q4, before this situation of packaging inflation came in. So, we have been able to tide over that impact.

Speaker #5: Without any kind of margin valuation, because we have growth, capacity utilization, the way we manage distribution, freight, the way our larger, bigger packs are growing—all of these are also helping us continuously keep a margin-accretive position.

Speaker #5: So, I do not see this to be, in the mid-term, becoming a loss figure. We do not really have a 5-rupee portfolio. I think that is also a very important point to consider.

Nitish Bajaj: I think that is also a very important point to consider. Our business is dominantly INR 10 or big packs in the ratio of two-thirds to one-third.

Speaker #5: Our business is predominantly in rupee 10 or big packs, in the ratio of two-thirds to one-third. Got that, Nitish. My second and last question is on the premium steppers.

Shirish Pardeshi [Head of Research: Got that, Nitish. My second and last question on the premium staples. It's looking at the price and the volume mix is really doing good. My only fear is that if the price escalation happens, will this 7% volume will fall to zero? Or how one should look at the? Because the price equation is a driver for this business.

Speaker #5: Looking at the price and the volume mix, it's really doing well. But my only fear is that if there is a price escalation, will this 7 percent volume fall to zero? Or, how should one look at it, because the price equation is a driver for this business.

Speaker #2: Yeah, so there is one part which is—

Asheesh Kumar Sharma: There is one part which is the entire price table of all the commodities. We do understand that the sunflower is really running little ahead of others. Just to give you an idea, in our premium staples, we also have Sundrop Heart. We have launched one another variant in it, in Sundrop Heart itself, with a different blend, which is allowing us to make sure that the least inflated commodity is where we are able to offer our consumers an attractive price. While we are passing on per kg, will there be a contraction? Not so much at a consumer level because we have two different this thing. Yes, if it happens, we have a safety net below it.

Speaker #3: ...the entire price table of all the commodities, right? Now, we do understand that sunflower is really running a little ahead of others. But just to give you an idea, in our premium steppers, we also have Sundrop Heart.

Speaker #3: Now, we have launched another variant in Sundrop Heart itself, with a different blend, which is allowing us to make sure that the least inflated commodity is where we are able to offer our consumers an attractive price.

Speaker #3: So, while we are passing on per kg, will there be a contraction? Not so much at a consumer level, because we have two different, this thing.

Speaker #3: But yes, if it happens, we have a safety net below it. We have two variants, one in the form of sun drop light and another in the form of sun drop heart plus, which we have aggressively priced and changing the formulation that we had there.

Asheesh Kumar Sharma: We have two variants, one in the form of Sundrop Lite and another in the form of Sundrop Heart+, which we have aggressively priced and changing the formulation that we had there. We have an approval for those, and that is how in the longer run, we will play at both levels.

Speaker #3: So, we have an approval for those, and that is how, in the longer run, we will play at both levels. Right?

Speaker #5: Yeah. Also, Shirish, see, if you look at the recent history, we are actually talking about our volume expanding in the context of commodity inflation. Right?

Nitish Bajaj: Also, Shirish, see, if you look at the recent history, we are actually talking our volume expanding in the context of commodity inflation. I do understand when the commodity deflates, the value growth may come down. Volume is intrinsically showing good signs with whatever we are doing, even in the context of inflationary environment. I would leave it at that, because our endeavor would be to grow volumes by 4% to 5% in a sustainable way in this category. Historically, we had said we would want to hold volume. With more recent experiences over the last one and a half years, we are now coming to a position of saying we would ideally want to grow volume by 4% to 5%. Inflation in category can go in either direction, our endeavor will be to make sure that volume-wise, we keep gaining share.

Speaker #5: I do understand, when the commodity deflates, the value growth may come down. But volume is intrinsically showing good signs with whatever we are doing.

Speaker #5: Even in the context of an inflationary environment. So I would leave it at that, because our endeavor would be to grow volumes by 4–5 percent in a sustainable way in this category.

Speaker #5: Historically, we had said we would want to hold volume. With more recent experiences over the last one and a half years, we are now coming to a position of saying we would ideally want to grow volume by 4% to 5%.

Speaker #5: Inflation in the category can go in either direction. But our endeavor will be to make sure that, volume-wise, we keep gaining share. I would say 4 to 5 percent will be somewhere in the nature of the kind of growth, because this category is growing at about 3 to 4 percent year-on-year in volume terms.

Nitish Bajaj: I would say 4% to 5% will be somewhere in the nature of the kind of growth, because this category is growing at about 3% to 4% year on year in volume terms. We want to at least play the category game and continue not making this business a loss in margins or decline in margins as a business.

Speaker #5: So we want to at least play the category game and continue not making this business a loss in margins or a decline in margins as a business.

Speaker #5: Okay, just one quick follow-up on this.

Shirish Pardeshi [Head of Research: Okay. Just one quick follow-up on this.

Speaker #2: Sorry to interrupt,

Operator: Sorry to interrupt, Pardeshi.

Speaker #4: Mr. Pardesh.

Speaker #5: No, no. I'm completing. This is in connection with the Sundrop only. So Nitish, the Sundrop Heart Jodi pack will continue throughout the festive season, or is it a tactical offer?

Shirish Pardeshi [Head of Research: No, I'm completing. This is in connection with the Sundrop only. Nitish, the Sundrop Haar Jodi pack will continue throughout the festive season or it's a tactical offer?

Speaker #2: It will continue throughout.

Nitish Bajaj: It will continue throughout. It's something which we had as a mode or let's say a strength in our Sundrop SuperLite business. We thought it's also an opportunity to make the same proposition and get some trade pull for a proposition which is already successful in our SuperLite business. It will continue.

Speaker #5: It's something which we had as a must, or let's say a strength, in our Sundrop Lite and Super Lite business. We thought it's also an opportunity to make the same proposition and get some trade pull for a proposition which is already successful in our Super Lite business.

Speaker #5: So it will continue. Okay. Thank you, and all the best.

Shirish Pardeshi [Head of Research: Okay. Thank you and all the best.

Speaker #2: Thank you.

Nitish Bajaj: Thank you.

Speaker #4: Thank you. Ladies and gentlemen, in the interest of time, we will take the last question from the line of Nachiket Kalia from NK. Please go ahead.

Operator: Thank you. Ladies and gentlemen, in the interest of time, we will take the last question from the line of Nachiket Kale from NK. Please go ahead.

Speaker #5: Yeah. Hi. Thank you, sir, and thanks for the great insights at the start of the call. Those sectoral and segmental insights are really helpful.

Nachiket Kale: Hi. Thank you, sir, and thanks for the great insights at the start of the call. The segmental insights are really helpful. I just have one question on the peanut butter category. I realize we have run into a little bit of a headwind there. Could you emphasize what's the strategy? I understood the quick com and e-com is doing well. As a category, there's intense competition even from some VC-funded separate brands as well. Could you just elaborate further on that front?

Speaker #5: I just have one question on the peanut butter category. I realize we have run into a little bit of a headwind there, so could you emphasize what's the strategy? I understood that quick commerce and e-comm are doing well.

Speaker #5: But as a category, there’s intense competition, even from some PE-funded separate brands as well. So, could you just elaborate further on that front?

Speaker #2: Sorry. I would like to understand, Nachiket, when you talk about P&L has got into some headwind, what is the specific concern you are picking up? If I could also nuance it or answer that better?

Nitish Bajaj: Sorry, I would like to understand, Nachiket, when you talked about-

Nachiket Kale: Yeah

Nitish Bajaj: P&L has got into some headwind, what is the specific concern you are picking up? If I could also nuance it or answer that better.

Speaker #5: So, the headwind being competition in the peanut butter category.

Nachiket Kale: No, the headwind being competition in the peanut butter category.

Speaker #2: Oh, you are talking about peanut butter. Yeah.

Nitish Bajaj: Oh, you're talking peanut butter. Sorry.

Nachiket Kale: Yeah.

Speaker #5: And that question is on peanut butter.

Nitish Bajaj: Sorry.

Nachiket Kale: The entire question is on peanut butter.

Speaker #2: Got it, got it. I'm so sorry—I somehow heard it as 'P&L.' My bad, my apologies. On the peanut butter, see, I think India is seeing a very strong protein wave.

Nitish Bajaj: Got it. I'm so sorry. I somehow heard you say P&L, my bad, my apologies. On the peanut butter, see, I think India is seeing a very strong protein wave. When we launched peanut butter business in the country for the first time-

Speaker #2: When we launched the peanut butter business in the country for the first time, and this was done somewhere in 2010, at that time there wasn't any protein wave.

Nachiket Kale: Yeah

Nitish Bajaj: This we had started somewhere in 2010. That time there wasn't any protein wave, so we had built our category on the proposition of strength and immunity, and as a table spread the family can consume. It wasn't really in the domain of protein as a promise. It was overall good health as a promise, which is what-

Speaker #2: So, we had built our category on the proposition of strength and immunity, and as a table spread the family can consume. So, it wasn't really in the domain of protein as a promise.

Speaker #2: It was overall good health as a promise, which is what Sundrop as a brand stands for. So we thought Sundrop is a brand that stands for good health.

Nachiket Kale: Yeah

Nitish Bajaj: Sundrop as a brand stands for. We thought Sundrop as a brand stands for good health. We bring another variant which is all about good health for the family in the form of peanut butter. That journey helped us establish this category in the country. Somewhere in the post-COVID era, we have seen protein wave becoming very strong, and many players brought in two, three innovations in this area. One came in the form of higher protein variants, where you fortified by adding whey or other forms of protein. Second came in the form of natural protein butter with which you are not adding any stabilizer, so that your proposition is 100% natural. Third came, because peanut is not a natural taste for Indian palate, came in the form of chocolate, which is a more acceptable taste.

Speaker #2: We bring another variant, which is all about good health for the family, in the form of peanut butter. And that journey helped us establish this category in the country.

Speaker #2: Somewhere in the post-COVID era, we have seen the protein wave becoming very, very strong. And many players brought in two or three innovations in this area.

Speaker #2: One came in the form of higher protein variants, where you fortified by adding whey or other forms of protein. The second came in the form of natural protein butter, with which you are not adding any stabilizer.

Speaker #2: So that your proposition is 100 percent natural. Third, it came because peanut is not a natural taste for the Indian palate. It came in the form of chocolate, which is a more acceptable taste.

Speaker #2: And all these three innovations really took off in the e-commerce channel. We have lost out on that race because we did not have any of those products in the portfolio.

Nitish Bajaj: All these three innovations really took off in the e-commerce channel. We have lost out that race because we did not have any of that product in the portfolio. Today, the market is about 15% in the form of standard peanut butter, where we operate in e-commerce, and 85% in the form of value-added peanut butter. We have about 33% share in the standard peanut butter market. We have a 3% share in the value-added peanut butter market. We have brought in now the innovation. Our endeavor will be to get to strong double-digit and then maybe take it to our natural share over a period of time.

Speaker #2: Today, the market is about 15% in the form of standard peanut butter, where we operate in e-commerce, and 85% in the form of value-added peanut butter.

Speaker #2: We have about a 33 percent share in the standard peanut butter market. We have a 3 percent share in the value-added peanut butter market. We have now brought in the innovation.

Speaker #2: Our endeavor will be to get to strong double digits and then maybe take it to our natural share over a period of time. We intrinsically believe that we have a quality ecosystem, a manufacturing ecosystem, and a brand power to be able to drive that shift in this category and achieve significant improvement in our share, aiming to reach double digits in the near term.

Nitish Bajaj: We intrinsically believe that we have a quality ecosystem, a manufacturing ecosystem, and a brand power to be able to do that shift in this category and get improvement in our share significantly to get to double-digit in near term, and possibly go for our natural share in the longer term. That is, of course, what we are talking today is catch-up. We are also working on the side of certain new innovations, like the way the category codes were changed by bringing some new tastes, by bringing some new fortifications. We are also working at our own side on certain new innovations, which could help us further expand the value-added offerings in this space.

Speaker #2: And possibly go for our natural share in the longer term. And so that is, of course, what we are talking today—it is catch-up. We are also working on the side of certain new innovations, like the way the category codes were changed by bringing some new tastes and fortifications.

Speaker #2: We are also working on our own side on certain new innovations, which could help us further expand the value-added offerings in this space. Through these initiatives, we are very confident that we should achieve our growth ambition and our share levels in the longer term, and immediately get to stronger growth recovery in the next few quarters.

Nitish Bajaj: Through these initiatives, we are very confident that we should get to our growth ambition or our share levels in the longer term and immediately get to stronger growth recovery in the next few quarters.

Speaker #5: Yeah, true, sir. As a customer also, I got introduced to this category through your product. But it feels like there are multiple subcategories in that segment where you could expand your share.

Nachiket Kale: Yeah, true, sir. As a customer, also, I got introduced to this category through your product.

Nitish Bajaj: Okay

Nachiket Kale: it feels like there are multiple subcategories in that segment where you could expand your share.

Speaker #5: So, thanks for the insights on that front. And any insights you could share on how you would be looking to market it? Because, especially with newer brands, as you rightly said, who have taken up the space.

Nitish Bajaj: Yeah

Nachiket Kale: thanks for the insights on that front. Any insights which you could share on how would you be looking to market it, because especially the newer brands, as you rightly said, were taking up the space. They are a lot more on the digital front, and we keep seeing them spend a lot, and they are not inclined towards making profits anytime soon. That competition is tough in that sense.

Speaker #5: They are a lot more active on the digital front, and we keep seeing them spend a lot. They are not inclined towards making profits anytime soon.

Speaker #5: So, that competition is tough in that sense.

Speaker #2: Yes. So, see, we are cognizant of the operating model. We have already put in a very strong team in control of our e-commerce business, and that is what you are seeing in category after category.

Nitish Bajaj: Yes, sir. We are cognizant of the operating model. We have already put in very strong team in control of our e-commerce business, and that is what you are seeing in category after category. Our e-commerce growth is sharper or better than our growth overall. In general, is always ahead of market growth. That is what we would want to achieve here also. We would, of course, invest in consumer acquisition and brand equity through new age digital channels. We are also putting a full program in place on investing in digital ecosystem for peanut butter recovery.

Speaker #2: Our e-commerce growth is sharper, or better, than our overall growth. And, in general, it is always ahead of market growth. That is what we would want to achieve here as well.

Speaker #2: We would, of course, invest in consumer acquisition and brand equity through new-age digital channels. So we are also putting a full program in place for investing in the digital ecosystem for peanut butter recovery.

Speaker #2: So, we will have to play the game as it is being played—that we are cognizant of. We do, of course, have our own manufacturing.

Nachiket Kale: Okay.

Nitish Bajaj: We will have to play the game as it is being played. That we are cognizant of. We do, of course, have our own manufacturing, so we do have ecosystem to do it in a sustainable cost basis as we go ahead. From the cost side or margin side, we aren't really worried there. We think the value-added offerings anyway offer the premium pricing.

Speaker #2: So we do have an ecosystem to do it on a sustainable cost basis as we go ahead. So from the cost side or margin side, we aren't really worried here.

Speaker #2: We think the value-added offerings, anyway, offer a premium pricing. And hence, as we intensify our effort on gaining share in the value-added side, we can do it profitably.

Nachiket Kale: Okay

Nitish Bajaj: As we intensify our effort on gaining share in the value-added side, we can do it profitably.

Speaker #5: Okay, got it. Thank you so much.

Nachiket Kale: Okay, got it. Thank you so much.

Speaker #2: Thank you.

Nitish Bajaj: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to management for the closing comments.

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

Speaker #2: So, I know we have already exceeded the allotted time, so I would like to thank you all for your questions.

Nitish Bajaj: I know we have already over exceeded the time, so I would like to thank you all for your questions. If there are any set of questions which we have not been able to answer, I would request you to reach out to our company secretary, Kavita, and management and all of us will be happy to respond back to you and address your questions and queries. Thank you so much and wish you all the best.

Speaker #2: If there are any sets of questions that we have not been able to answer, I would request you to reach out to our Company Secretary, Kavitha.

Speaker #2: Management and all of us will be happy to respond to you and address your questions or queries. Thank you so much, and we wish you all the best.

Speaker #5: Thank you.

Nachiket Kale: Thank you.

Speaker #1: Thank you, sir. On behalf of Anand Rati Shares and Stock Brokers Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.

Operator: Thank you, sir. On behalf of Anand Rathi Shares and Stock Brokers Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.

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Q1 2027 Sundrop Brands Ltd Earnings Call

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