Q1 2027 Honasa Consumer Ltd Earnings Call

August 13, 2026

Operator: Ladies and gentlemen, good day and welcome to the Honasa Consumer Limited Q1 FY27 earnings conference call hosted by JM Financial. 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 this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Puja Dave from JM Financial. Thank you, and over to you, ma'am.

Operator: Ladies and gentlemen, good day and welcome to the Honasa Consumer Limited Q1 FY 2027 Earnings Conference call hosted by JM Financial. 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 this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Pooja Kubadia from JM Financial. Thank you, and over to you, ma'am.

Speaker #1: Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Ms. Pooja Kubadia from JM Financial. Thank you, and over to you, ma'am.

Speaker #2: Hello. Good evening, everyone. Welcome to the Q1 FY27 earnings conference call of Honasa Consumer Limited. Today on the call, we have Mr. Varun Alag, Co-founder, Chairman, and CEO.

Pooja Kubadia: Hello. Good evening, everyone. Welcome to Q1 FY27 earnings conference call of Honasa Consumer Limited. Today on call, we have Mr. Varun Alagh, Co-founder, Chairman, and CEO; Ms. Ghazal Alagh, Co-founder and Chief Innovation Officer; and Mr. Ramanpreet Sohi, Chief Financial Officer. We will start the conference with prepared remarks from the management. Afterwards, we will open the floor for question and answers. Over to you, Mr. Varun.

Pooja Kubadia: Hello. Good evening, everyone. Welcome to Q1 FY 2027 earnings conference call of Honasa Consumer Limited. Today on call, we have Mr. Varun Alagh, Co-Founder, Chairman, and CEO; Ms. Ghazal Alagh, Co-Founder and Chief Innovation Officer; and Mr. Ramanpreet Sohi, Chief Financial Officer. We will start the conference with prepared remarks from the management. Afterwards, we will open the floor for question and answers. Over to you, Mr. Varun.

Speaker #2: Ms. Ghazal Alag, Co-founder and Chief Innovation Officer, and Mr. Ramanpreet Sohi, Chief Financial Officer. We will start the conference with remarks from the management, after which we will open the floor for questions and answers.

Speaker #2: Over to you, Mr. Varun.

Varun Alagh: Hi. Hello, everyone. Welcome to the quarterly call for Honasa Consumer for Q1 FY27. We have our team, Raman, Rajan, and our team with us. I will take you through the performance update quickly, and then we will open the house for question and answers. Moving forward. Okay. Yeah, sorry. Yeah. Starting with the section, which is crystal gazing into the future of Indian beauty. This time the theme that we have captured is the theme of fragrances as a category. Fragrance is a very interesting category. Globally, as we speak, fragrance is the largest delta driver as a category in beauty and personal care. It is also one of the largest categories, and especially a category which has premiumized very effectively over the last couple of decades. Currently, if you look at India, it is one of the fastest growing categories amongst beauty and personal care.

Varun Alagh: Hi. Hello, everyone. Welcome to the quarterly call for Honasa Consumer for Q1 FY 2027. We have our team, Raman, Ghazal, and our team with us. I will take you through the performance update quickly, and then we will open the house for question and answers. Moving forward. Okay. Yeah, sorry. Yeah. Starting with the section, which is crystal gazing into the future of Indian beauty. This time the theme that we have captured is the theme of fragrances as a category. Fragrance is a very interesting category.

Speaker #3: Hi. Hello, everyone. Welcome to the quarterly call for Honasa Consumer for Q1 FY27. We have our team—Raman, Ghazal, and our team—with us.

Speaker #3: But I'll take you through the performance update quickly, and then we will open the house for questions and answers. So, moving forward—yeah, sorry.

Speaker #3: Yes. So starting with the section which is Crystal Gazing into the Future of Indian Duty, this time the theme that we have captured is the theme of pregnancy as a category.

Speaker #3: Pregnancy is a very interesting category. Globally, as we speak, pregnancy is the largest delta driver as a category in beauty and personal care. It's also one of the largest categories and especially a category which has premiumized very effectively over the last couple of decades.

Varun Alagh: Globally, as we speak, fragrance is the largest delta driver as a category in beauty and personal care. It is also one of the largest categories, and especially a category which has premiumized very effectively over the last couple of decades. Currently, if you look at India, it is one of the fastest growing categories amongst beauty and personal care.

Speaker #3: Currently, if you look at India, it is one of the fastest-growing categories among beauty and personal care. India's current penetration for fragrances is just 3% versus 11% globally.

Varun Alagh: Indian currently penetration for fragrances is just 3% versus 11% globally, which is why if you look at in terms of the BPC market share, in India, it is just 3% market share versus 11% for US by penetration. It is also a category which is moving towards e-commerce. Seven years ago, one of the things which was being highlighted was that this category is very about experiences and hence might not move to e-commerce. But we have seen strong move towards e-commerce because of trial packs that have come in this category, as well as understanding of notes which have grown amongst consumers. If you look at Indian market also, we have seen a very strong transition from deodorants to fragrances. We believe over the next decade, this is going to be a very interesting category to participate in for BPC players.

Speaker #3: Which is why, if you look at it in terms of the BPC market share, in India it's just 3% market share versus 11% for the US, while penetration is—it's also a category which is moving towards e-commerce. Seven years ago, one of the things which was being highlighted was that this category is very much about experiences and hence might not move to e-commerce.

Speaker #3: But we have seen strong move towards e-commerce because of trial packs that have come in this category as well as understanding of notes which have grown amongst consumers.

Varun Alagh: We have seen strong move towards e-commerce because of trial packs that have come in this category, as well as understanding of notes which have grown amongst consumers. If you look at Indian market also, we have seen a very strong transition from deodorants to fragrances. We believe over the next decade, this is going to be a very interesting category to participate in for BPC players.

Speaker #3: If you look at the Indian market also, we have seen a very strong transition from deodorants to fragrances. So we believe, over the next decade, this is going to be a very interesting category to participate in for BPC players, and which is why, in our five-year journey, we had talked about this being one of the categories that Honasa will be interested in unlocking as Horizon 2 categories.

Varun Alagh: Which is why in our five-year journey, we had talked about this being one of the categories that Honasa will be interested in unlocking as rising new categories. Moving from the future to present, which is our financial snapshot for Q1. We are glad to announce that this has been a great quarter for our organization. The team has done brilliantly well in delivering 32% growth with an EBITDA of almost INR 110 crores and a PAT of INR 90 crores. This has also been driven with volumes. 30.5% volume growth is what we have seen, and we continue to be negative working capital and generating almost INR 83 crores of cash this quarter. It is a quarter which has seen significant improvement in our EBITDA profile over the same quarter last year.

Varun Alagh: Which is why in our five-year journey, we had talked about this being one of the categories that Honasa will be interested in unlocking as rising new categories. Moving from the future to present, which is our financial snapshot for Q1. We are glad to announce that this has been a great quarter for our organization. The team has done brilliantly well in delivering 32% growth with an EBITDA of almost INR 110 crore and a PAT of INR 90 crores. This has also been driven with volumes. 30.5% volume growth is what we have seen, and we continue to be negative working capital and generating almost INR 83 crores of cash this quarter. It is a quarter which has seen significant improvement in our EBITDA profile over the same quarter last year.

Speaker #3: Moving from the future to the present, which is our financial snapshot for Q1, I'm glad to announce that this has been a great quarter for the organization. The team has done brilliantly well in delivering 32% growth, with a bid of almost ₹110 crores and a PAT of ₹90 crores.

Speaker #3: This has also been driven by volumes. We have seen 30.5% volume growth, and we continue to be in negative working capital, generating almost ₹83 crores of cash this quarter.

Speaker #3: It's a quarter which has seen significant improvement in our EBITDA profile over the same quarter last year. As we have mentioned in the past, and we continue to hold, the two large buckets through which we see our business improving our EBITDA profile are the bucket of NP, which improves with a higher mix of profitable B2B channels, growth momentum of our core brands, as well as our younger brands becoming more profitable.

Varun Alagh: As we have mentioned in the past, and we continue to hold, the two large buckets through which we see our business improving our EBITDA profile is the bucket of A&P, which improves with higher mix of profitable B2B channels, growth momentum of our own brands, as well as our younger brands becoming more profitable. While all of this happens, the absolute A&P spend still continue to grow, which is helping deliver strong growth for the company. So that model that we have talked about is clearly consistently playing out for the company. The second bucket that we have talked about is operating leverage. As we scale, we also see OpEx leverage coming in, and in this quarter, we have seen almost 300 to 350 basis points, which is because of mix impact and 100 odd basis points because of operating leverage.

Speaker #3: And while all of this happens, the absolute NP spend still continue to grow, which is helping deliver strong growth for the company. So that model that we have talked about is clearly consistently playing for the company.

Speaker #3: The second bucket that we have talked about is operating leverage. As we scale, we also see OPEX leverage coming in. In this quarter, we have seen almost 330 basis points, which is because of mix impact, and 100 basis points because of operating leverage.

Varun Alagh: The second bucket that we have talked about is operating leverage. As we scale, we also see OpEx leverage coming in, and in this quarter, we have seen almost 300 to 350 basis points, which is because of mix impact and 100 odd basis points because of operating leverage.

Speaker #3: But there is also 50 basis points because of seasonality within this quarter. For us, Q1 being summer quarter and some of our core categories being face wash and sunscreen, which are also high emerging categories.

Varun Alagh: But there is also 50 basis points because of seasonality within this quarter for us. Q1 being summer quarter and some of our core categories being face wash and sunscreens are also high margin categories. This quarter usually also is a relatively healthier quarter, so that also is circling there. Of course, thirdly, there is a non-recurring one-time OpEx benefit that we have seen within this quarter. But all in all, the commitment that we have made from a five-year perspective, which is that we will continue to expand EBITDA margin by 100 to 150 basis points each year to get to that 15% EBITDA margin in five years is something that we are moving towards and is something that we stick to. Of course, by quarters it will vary. But we have seen a good movement as we have grown here in this quarter.

Speaker #3: This quarter is usually also the relatively healthier quarter. So that also is sort of there. And of course, thirdly, there is a non-recurring one-time OPEX benefit that we have seen within this quarter.

Speaker #3: But all in all, the commitment that we have made from a five-year perspective—which is that we will continue to expand EBITDA margin by 100 to 150 basis points each year, to get to that 15% EBITDA margin in five years—is something that we are moving towards and something that we stick to.

Varun Alagh: But all in all, the commitment that we have made from a five-year perspective, which is that we will continue to expand EBITDA margin by 100 to 150 basis points each year to get to that 15% EBITDA margin in five years is something that we are moving towards and is something that we stick to. Of course, by quarters it will vary. But we have seen a good movement as we have grown here in this quarter.

Speaker #3: And we have, of course, by quarters, it will vary. But we've seen good movement as we have grown in this quarter. This is a slide that we had shown in the past three quarters as well, after the Flipkart settlement process came in.

Varun Alagh: This is a slide that we had showed in the past three quarters as well after the Flipkart settlement process came in. This is actually the last quarter we will be sharing this, because from next quarter onwards, the base of settlement will become clean, and then our reported growth and our like-to-like growth will actually become same then. Currently, there is a slight difference that you see which happens because of the settlement issue. But we have explained this in the past as well, and we continue to see this next quarter onwards, it should get evened out. The healthy thing is about us being able to deliver this growth on the back of the stated strategy. The stated strategy was that we will be sharply investing in a few focus categories, and those focus categories will help us drive strong growth. We have seen that.

Speaker #3: This is actually the last quarter we'll be sharing this because from next quarter onwards, the base of settlement will become clean. And then we'll be able to our reported growth and our like for like growth will actually become seen then.

Speaker #3: Currently, there is a slight difference that you see, which happens because of the settlement issue. But we have explained this in the past as well, and we continue to see this.

Varun Alagh: But we have explained this in the past as well, and we continue to see this next quarter onwards, it should get evened out. The healthy thing is about us being able to deliver this growth on the back of the stated strategy. The stated strategy was that we will be sharply investing in a few focus categories, and those focus categories will help us drive strong growth. We have seen that.

Speaker #3: Next quarter onwards, it should get cleaned up. The healthy thing is about us being able to deliver this growth on the back of the stated strategy.

Speaker #3: The stated strategy was that we will be sharply investing in a few focus categories. And those focus categories will help us drive strong growth.

Speaker #3: We have seen that focus categories have actually grown by over 35%, and we have also seen growth coming across channels. E-commerce channels showed over 20% growth, and our general trade and modern trade channels as well. All the work that we have put into redesigning our distribution system and hiring the right kind of GT teams has really helped us in terms of on-ground GT growth, which is now at over 40% for secondary growth.

Varun Alagh: Focus categories actually have grown 35% plus, and we have also seen growth coming across channels. Our e-commerce channel, 20% plus growth. Our general trade and modern trade, all the work that we have put in redesigning our distribution system, the hiring of the right kind of GD teams, has actually really helped us in terms of on-ground GD growth, which are now at 40% plus for secondary growth. In parallel, the strong brand strength and traction that we have been developing is showcased in modern trade optics, where we have 40% plus growth in terms of optics. Now the contribution of focus categories has also increased to almost 85% in Q1 FY27. Mamaearth are core, again, another area which has been an area of focus for us, to make sure that our core continues to grow strongly.

Speaker #3: And in parallel, the strong brand strength and traction that we have been developing is showcased in modern trade offtakes, where we have 40%+ growth in terms of offtakes.

Speaker #3: And now, the contribution of focus categories has also increased to almost 85% in even FY '24 Q1. Mamaearth core, again, another area which has been an area of focus for us, to make sure that our core continues to grow strongly.

Speaker #3: And this is where the large brand playbook that we have built has been tested. And clearly, every quarter we have demonstrated it to become better.

Varun Alagh: This is where the large brand playbook that we have built has been tested. Clearly, every quarter we have demonstrated it to become better. This is in line with that. Mamaearth has accelerated to high teens growth in Q1 FY27, driven by focus categories. In fact, even within focus categories, driven by our hero SKUs which we have been focusing on. Rice is the number 1 face wash now. Ubtan is again growing in strong double digits. Rosemary shampoo is growing in strong double digits, and has become INR 100 crore plus ARR ingredient now. Sun care also grew very strongly this season for Mamaearth. Obviously, whatever we are focusing on is where our growths are also coming from. That just gives us confidence that this is an input-driven growth model. As long as we keep those inputs intact, we will continue to invest.

Speaker #3: This is in line with that. Mama has accelerated to high teens growth in Q1 FY27, driven by focus categories. In fact, even within focus categories, it's driven by our hero SKUs, which we've been focusing on.

Speaker #3: Dice has become our number one face wash now. Optum is again growing in strong double digits. Shampoo is a rosemary shampoo is growing in strong double digits.

Speaker #3: And has become a ₹100 crore-plus ARR ingredient now. And sun care also grew very strongly this season for Mama. So continuously, whatever we are focusing on is where our growth is also coming from.

Varun Alagh: Obviously, whatever we are focusing on is where our growths are also coming from. That just gives us confidence that this is an input-driven growth model. As long as we keep those inputs intact, we will continue to invest.

Speaker #3: And that just gives us confidence that this is an input-driven growth model. As long as we keep those inputs intact, we will continue to do well.

Varun Alagh: Of course, this growth would not come in if the consumer love backing the brand would not exist. We have worked strongly on product enhancement and communication relevance, and that is visible now in growth in brand searches. It is visible in our share of mind handling increase. It is visible in our Kantar brand power score, which is at its ever highest. I think all in all, consumer love is visible both in output metrics like revenue and market share, but also in input metrics which are measured from consumer tax. Apart from this, the core is growing strong, but the new is also growing stronger. I think for us, that is the headline, that both parts of the business are growing strongly now. Young brands continuing their strong growth at 40% plus.

Speaker #3: Of course, this growth will not come in if the consumer love backing the brand does not exist. So we have worked strongly on product enhancement and communication relevance.

Speaker #3: And that is visible now in growth in brand searches and it is visible in our share amongst handlers increase. It is visible in our Ganta brand power score, which is at its ever highest.

Speaker #3: So I think, all in all, consumer love is visible both in output metrics like revenue and market share, but also in input metrics, which are measured from consumer tracks.

Speaker #3: Apart from this, the core is growing strong, but the new is also growing stronger. And I think, for us, that's the headline—that both parts of the business are growing strongly now.

Speaker #3: Young brands continue their strong growth at 40% plus. Aqualogica Dr. Shed, we learn stays Regina. All of them have their own niche, their own sort of categories, their own PGs that they're talking to.

Varun Alagh: Aqualogica, Dr. Sheth's, BBlunt, Staze, BBlunt, all of them have their own niche, their own sort of categories, their own TGs that they are talking to, and we are using them to take higher share of the category, and executing them well, which is visible in the outcome of those. Specifically, the good news is that we now have the second INR 1,000 crore brand within our portfolio. This is a very heartening momentum news for us because we have been able to take our second brand to this, gives us more confidence that in future we will be able to build more INR 1,000 crore brands within the company. The brand recorded its highest-ever brand searches. The Derma Co has also seen strong traction in offline and modern trades, which is visible in units and shares now. Face cleanser has become a relevant category, more than INR 200 crores run rate now.

Speaker #3: And we are using them to take a higher share of DTC as a category, and executing them well, which is visible in the outcome of growth.

Speaker #3: Specifically, the good news is that we now have the second ₹1,000 crore brand within our portfolio. This is a very heartening moment and news for us because we've been able to take our second brand to this level. This gives us more confidence that in the future we'll be able to build more ₹1,000 crore brands within this company.

Speaker #3: The brand recorded its highest ever brand searches has also seen strong traction in offline and modern trades, which is visible in news and shares now.

Varun Alagh: The brand recorded its highest-ever brand searches. The Derma Co has also seen strong traction in offline and modern trades, which is visible in units and shares now. Face cleanser has become a relevant category, more than INR 200 crores run rate now.

Speaker #3: Face cleansers has become a relevant category in more than 200 crores run rate now. And the EBITDA profile as the brand grows continues to become better.

Varun Alagh: The EBITDA profile as the brand grows continues to become better, and it has entered teens EBITDA club now. That is a healthy direction that we continue to see for the brand. BBlunt, which we acquired in January, it continues to do well. It has reached ARR of INR 150 crores in the last quarter. Since we acquired, we have actually grown it almost 100%, and we have also been able to expand the franchise of the brand to Maharashtra, open a new category as well as unlock new channels, which is what our bases of acquisition growth modeling was. We have actually been able to deliver it. This again shows that the company has the muscle to do inorganic acquisitions and actually scale them faster, which in the long term will continue to be growth drivers for Honasa. We have seen strong growth in both general trade and modern trade.

Speaker #3: It's entered teams EBITDA club now. So that's a healthy dimension that we continue to see for the brand. BTN ventures, which we acquired in January, continues to do well.

Speaker #3: It has reached ARR of 150 crores in the last quarter. Since we acquired, we've actually grown it almost 100%. And we've also been able to expand the franchise of the brand to Maharashtra, Open, a new category, as well as unlock new channels, which is what our BCs of acquisition growth modeling was.

Speaker #3: And we've actually been able to deliver it. This again shows that the company has the muscle to do inorganic acquisitions and actually scale them faster, which in the long term will continue to be a growth driver for Honasa.

Varun Alagh: We have actually been able to deliver it. This again shows that the company has the muscle to do inorganic acquisitions and actually scale them faster, which in the long term will continue to be growth drivers for Honasa. We have seen strong growth in both general trade and modern trade.

Speaker #3: We have seen strong growth in both general trade and modern trade. Again, an area where we strongly focused, improved our distribution model, and improved our execution.

Varun Alagh: Again, an area where we strongly focused, improved our distribution model, improved our execution, got higher quality distributors, reduced our DOH. All of that is visible in daily convenience stores, which are coming in retail, as well as the brand strength, like I said, is visible in the modern trade growth spend. This has come by gaining share. Almost 350 basis points gained in share in face washes, 160 basis points gained in share in shampoos. All in all, a pretty healthy execution by the offline team leading to outstanding results. E-commerce channel grows strongly. We have a strong focus. We continue to focus on three areas. We continue to build our focus categories, which are actually growing very fast in e-commerce. We continue to focus on gaining share in quick commerce.

Speaker #3: Got higher-quality distributors, reduced our EOH, and all of that is visible in healthy secondary sales growth, which are coming in detail. As well as the brand strength, like I said, is visible in the modern trade growth.

Speaker #3: This has come by gaining share—so, almost 350 basis points gained in share in face washes, and 160 basis points gained in share in shampoos.

Speaker #3: All in all, a pretty healthy execution by the offline team, leading to outstanding results. The e-commerce channel grows strongly. We have a strong focus, and we continue to focus on three areas.

Speaker #3: We continue to build our focus categories, which are actually grown in over 25% in e-commerce. We continue to focus on gaining share in quick commerce.

Speaker #3: And we continue to focus strongly on taking share in tier two and beyond markets and channels, which are strong next, and which is visible in our overall growth.

Varun Alagh: We continue to focus strongly on taking share in Tier 2 and beyond markets channels which are strong there, and which is leading in our overall growth. Our innovation capabilities continues to strengthen our portfolio across brands, wherever we are seeing opportunities to serve the consumers better through newer ingredients, newer science, as well as newer formats. The company continues to innovate and bring products that consumers are giving back. We will continue to do that side. Innovation has been one of our strong edges, and we will make sure that we continue to do. I talked about fragrances at the beginning of this rendition, and one of the reasons was because we have finally entered this category. We have talked about this category multiple times in the past, that we like the category.

Speaker #3: Our innovation capabilities continue to strengthen our portfolio across brands, wherever we see opportunities to serve consumers better—through newer ingredients, newer science, as well as newer formats.

Speaker #3: The company continues to innovate and bring products that consumers are giving love to, and we will continue to do that. Innovation has been one of our strong edges, and we will make sure that it continues to remain so.

Speaker #3: I talked about fragrance at the beginning. Office renovation and that was one of the reasons was because we have finally entered this category. We have talked about this category multiple times in the past that we like the category.

Speaker #3: We have been doing work on this category for almost one and a half years. Make sure that we have a differentiated product proposition with which we are able to enter this category.

Varun Alagh: We have been doing work on this category for almost one and a half years to make sure that we have a differentiated product proposition with which we are able to enter this category. We finally have launched a brand called Fricken. It is India's first elixir-based brand, which is the highest dosed and the strongest form of perfume that we have brought to India. These are one of the key needs for Indians, given our temperature, given the sweat profile that we have, as well as external environments that we have, is perfumes which stay longer. That is what we have optimized this for. The perfumes are clinically tested for 12 hours long stay. The design with which we have launched is actually patented by Munafah. It is again a first world design that we have brought in fragrances for our connected impacts.

Speaker #3: And we finally have launched the brand called Thicken. It’s our first elixir-based brand, which is the highest-dosed and strongest form of perfume that we have brought to India.

Speaker #3: This is one of the key needs for Indians, given our temperature, the sweat profile that we have, as well as the external environment. We need perfumes which stay longer.

Speaker #3: And that's what we have optimized this for. The perfumes are clinically tested for 12 hours long stay. The design with which we have launched is actually patented by Honasa.

Varun Alagh: That is what we have optimized this for. The perfumes are clinically tested for 12 hours long stay. The design with which we have launched is actually patented by Munafah. It is again a first world design that we have brought in fragrances for our connected impacts.

Speaker #3: It is, again, a first-world design that we have brought in fragrances for our collectible bags. And they're very confident that this brand is going to be big and amazing.

Varun Alagh: We are very confident that this brand is going to be Fricken amazing as we scale it. With that, we come to the last section. As we grow, our community contributions also continue to grow. Our brands continue to plant more trees, teach more kids, give more certifications to women in perils, provide more fresh water as well as do more health checkups. We will continue to have purposeful growth as a company. With that, I will come to an end. Thank you so much for listening in. Would love to answer the questions that you have.

Speaker #3: As we scale, with that, we come to the last section. As we grow, our community contributions also continue to grow. Our brands continue to plant more trees, teach more kids, give more certifications to women in salons, provide more fresh water, as well as do more health checkups.

Speaker #3: And we'll continue to have purposeful growth as a company. With that, I'll come to an end. Thank you so much for listening in. Would love to answer the questions that you have.

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

Varun Alagh: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Participants viewing the webcast may enter their text question below the screen. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Vivek Maheshwari with Jefferies. Please go ahead.

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

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

Speaker #1: Participants viewing the webcast may enter their text question below the screen. Ladies and gentlemen, we will now wait for a moment while the question queue assembles.

Speaker #1: Our first question comes from the line of Vivek M. with Jefferies. Please go ahead.

Vivek Maheshwari: Hi, Varun and team. Good evening. Two questions from my side. First is, I know you are a very young company with young brands, but when we look at purely from a year-over-year comps, as we head into, let's say the rest of the year, the comps start to get higher. On that, let's say revenue base, what is your expectation for growth, let's say from a nine-month perspective?

Speaker #3: Hi Varun and team, good evening. Two questions from my side. First is, you know, I know you are a very young company with young brands.

Speaker #3: But when we look at, you know, purely from a bio comms, as we head into, let's say, the rest of the year, the comms start to get higher.

Speaker #3: On that, you know, let's say, revenue base, what is your expectation for growth, let's say, from a nine-month perspective?

Speaker #4: Hey, Vivek. So, Vivek, like we've said, you know, from a five-year view, we have a high team's agenda. We will make sure that we deliver that category over the next five years.

Varun Alagh: Hey, Vivek. Vivek, like we've said from a five-year view, we have a high teens agenda. We will make sure that we deliver that CAGR over the next five years. If you divide that over years, there'll be years where we'll do better than that in terms of our overall growth profile, and there'll be years where we'll be just about that CAGR in terms of our growth profiles. I think this is going to be a year where we'll be better than the CAGR on the growth profile. The attempt will always be to make sure that we continue to grow faster. Priority will be wherever we can reinvest to grow faster, we do. That's what we're doing. But we stick to our final call-out of where we want to get to, which we communicated in our investor day messages.

Speaker #4: If you divide that over years, there'll be years where we'll do better than that in terms of our overall growth profile, and there'll be years where we'll be just about, you know, in that category in terms of our growth profile.

Speaker #4: And I think this is going to be an year where we'll be better than that category on the growth profile. And the attempt will always be to make sure that we continue to grow faster priorities will be wherever we can reinvest to grow faster.

Varun Alagh: The attempt will always be to make sure that we continue to grow faster. Priority will be wherever we can reinvest to grow faster, we do. That's what we're doing. But we stick to our final call-out of where we want to get to, which we communicated in our investor day messages.

Speaker #4: We do, and that's what we're doing. But we stick to our five-year call-out of where we want to get to, which we communicated in our Investor Day.

Speaker #3: Sure. And just to follow up, Varun, do you think, you know, on the Mama Earth side, how do you, you know, think the trajectory will be for the rest of the years?

Vivek Maheshwari: Sure. Just a follow-up, Varun. Do you think on the Mamaearth side, how do you think the trajectory will be for rest of the years? You have done exceptional job in this quarter, and I think Mamaearth for the last few quarters has also done very well. What do you think will be the trajectory? Apologies if the question is more near term, but I just want to know how does it progress for the rest of the year?

Speaker #3: You have done an exceptional job in this quarter. And I think Mamaearth, for the last few quarters, has also done very well. What do you think will be the trajectory?

Speaker #3: And apologies if the question is more near term, but I just want to know how does it, you know, how does it progress for the rest of the year?

Varun Alagh: You might find my answers again boring, but like we have said, Mamaearth from a 5-year perspective will be a double-digit CAGR growth story. We stick to that story, so we would make sure we deliver that. Again, it usually never is an average journey over the next 5 years. There are years which we will do better in terms of our growth profiles, and there will be years where we will be sort of almost at the level that we said. This year, again, even for Mamaearth, will be better than the planning kind of profile is how it is sort of looking and feeling like. The inputs that we are doing, the distribution gains that we are sort of getting are actually serving us in getting to the goal, if you would.

Speaker #4: You might find my answer again boring, but like we have said Mama Earth from a five-year perspective, will be a double-digit category growth story.

Speaker #4: We stick to that story. We would make sure we deliver that. Again, it usually never is an average journey over the next five years.

Speaker #4: There are years which we'll do better in terms of our growth profiles. And where there'll be years where we'll be sort of in almost at the level that we've said.

Speaker #4: This year, again, even for Mamaearth, will be better than the planning category profile is how it's sort of, you know, looking and feeling like.

Speaker #4: The inputs that we are doing, the distribution gains that we are sort of, you know, getting are actually serving us in getting to the goal that we wanted.

Speaker #3: Got it. And second question is on your point on, you know, on the callout in the presentation on gaining shares on quick commerce platform.

Vivek Maheshwari: Got it. Second question is on your point on the call-out in the presentation on gaining shares on quick commerce platform. Two parts or two things over here. Apologies first if it is a naive question, but what level of data in the platform share with you? When you say gaining share, is it at the category level or is it at an overall level, number 1? The second part is when we look at any of the, let us say, QC apps, it looks like that the number of brands are expanding by the day, literally on a daily basis. How is it that you are able to still gain market share given that there is a traditional FMCG from which markets share can be gained, but you yourself have been ahead in this game.

Speaker #3: Now, two parts or two things over here. Apologies first if it's a naive question, but what level of data that, you know, you know, the platform share with you when you say gaining share, is it at the category level or is it at a, you know, at an overall level number one?

Speaker #3: And the second part is with the, you know, when we look at the any of the, you know, let's say QC apps, we look, it looks like that the number of brands are like, you know, expanding by the day.

Speaker #3: Literally on a daily basis, how is it that, you know, you are able to still gain market share, given that, you know, there is traditional FMCG from which market share can be gained, but you yourself have been ahead in this game?

Speaker #3: So, how are you ensuring this? There are two parts—if you can answer on both, please.

Vivek Maheshwari: How are you ensuring? Two parts, if you can answer on both, please.

Speaker #4: So Vivek, we engage with the QC teams and we get an understanding of category-level shares. So we would track, for example, what is Honasa's share in face wash, in sunscreen. Of course, this is not third-party audited data like AC Nielsen, which is why we would not, sort of, you know, share it on the platform.

Varun Alagh: We engage with the QC teams, and we get understanding of category level shares. We would track, for example, what is Honasa share in a face wash, in a sunscreen. Of course, this is not a third-party audited data like ACNielsen, which is why we would not sort of share it in the platform. This is a data that between us, customer, and partner because of the relationship, and we get it, and we track that data. The data is at category level, and we look at Honasa share in every category and how we are gaining. That is to the first question. The second question, honestly, compared to e-commerce, quick commerce is, in our view, especially in our category, a further branded purchase play. Which means that if for any category in e-commerce, we see 50%, 60% of the sale coming from branded searches.

Speaker #4: This is a data that's between us customer and, you know, partner because of the relationship and, you know, we get it. And we track that data.

Speaker #4: So the data is at category level and we look at Honasa's share in every category and how we are gaining. So that's two the first question.

Speaker #4: The second question—honestly, compared to e-commerce, quick commerce is, in our view, especially in our category, a further branded purchase play. Which means that if, for any category in e-commerce, we see 50% to 60% of the sales coming from branded searches, right?

Varun Alagh: The second question, honestly, compared to e-commerce, quick commerce is, in our view, especially in our category, a further branded purchase play. Which means that if for any category in e-commerce, we see 50%, 60% of the sale coming from branded searches.

Varun Alagh: In case of quick commerce, it is higher. Hence, we believe that quick commerce, people are evolved enough to know the brands that they want to buy, especially in our categories, and they come searching for the brands. Quick commerce is able to fulfill that in just some minutes. For us, building the brands strongly in the minds of consumers, which is measured through our brand tracks, which is measured through the searches that we have, is the strength which is visible in our ability to gain share on quick commerce as well. As long as our brands continue get stronger, they will continue also gain shares in quick commerce.

Speaker #4: In case of quick commerce, it's higher. And hence we believe that quick commerce people buy, people are evolved enough to know the brands that they want to buy.

Speaker #4: Especially in our categories. And they come searching for the brands. And quick commerce is able to fulfill that in just a minute. So for us, building the brands strongly, in the minds of consumers, which is measured through our brand tracks, which is measured through the searches that we have, is the strength which was visible in our ability to gain share on quick commerce as well.

Speaker #4: So as long as our brands continue to get stronger, they will continue to also gain share in quick commerce, right? And we believe that in the long term, you know, Pareto is what will thrive on quick commerce as a format because finally, it's not an unlimited, you know, unlimited physical space play, digital space play, which is what, you know, e-commerce would be.

Varun Alagh: We believe that in the long term, Pareto is what will thrive on quick commerce as a format because finally, it is not an unlimited physical space play, digital space play, which is what our e-commerce would be. It is actually a constrained physical space play. Over time, the best velocity per square feet is what the channel will need to be tuned into. Brand which do better will continue to do even better over time. I think that is what our belief is.

Speaker #4: It is actually a constrained physical space play, and over time, the best velocity per square foot is what the channels will need to be tuned into.

Speaker #4: And brands which do better will continue to do even better over time. So I think that's what are the.

Speaker #3: Sure. Over time, I do understand, but, you know, at this stage, gaining share—I think compliments to your team, and wishing you all the best.

Vivek Maheshwari: Sure. Over time, I do understand, but at this stage, gaining share, I think compliments to you and your team, and wishing you all the best.

Speaker #4: Thank you.

Varun Alagh: Thank you.

Speaker #1: Thank you. Our next question comes from the line of Vidisha Sheth with Ambit Capital. Please go ahead.

Varun Alagh: Thank you. Our next question comes from the line of Videesha Sheth with Ambit Capital. Please go ahead.

Operator: Thank you. Our next question comes from the line of Videesha Sheth with Ambit Capital. Please go ahead.

Speaker #5: Hi. My first question was on the emerging younger brand portfolio. And this I'm looking at excluding the Derma Co. So we organic brands or even the inorganic ones, do it, we blunt ecological, Dr. Sheth.

Videesha Sheth: Hi. My first question is on the emerging younger brand portfolio, and this I am looking at excluding The Derma Co. The organic brands or even the inorganic ones, be it BBlunt, Aqualogica, Dr. Sheth's, it has been a little challenging to scale those brands beyond the INR 180, INR 200 crore ARR. With even Reginald reaching this similar number of INR 150 crore ARR, what are the initiatives that you are undertaking to scale up all of these brands to the next level, maybe to a INR 500 crore ARR?

Speaker #5: It's been a little challenging to scale those brands beyond the 180-200 crore ERR. And with even regional reaching a similar number of 150 crore ERR, what are the initiatives that you're undertaking to scale up all of these brands to the next level—maybe to 200 or even 500 crore ERR?

Speaker #4: So I think, you know, the playbook is fairly similar to the playbook that has worked for Mama Earth and Derma Co. It is about finding a differentiated proposition in a category doubling down on that proposition and actually gaining share within that category with that proposition.

Varun Alagh: I think the playbook is fairly similar to the playbook that has worked for Mamaearth and The Derma Co. It is about finding a differentiated proposition in a category, doubling down on that proposition, and actually gaining share within that category with that proposition. Different brands go through their own different journeys. Mamaearth has gone through its own journey. The Derma Co has gone through its own journey. Over time, we need to keep reflecting and contextualizing them versus the consumer and how they are evolving. Each of these brands, the younger brands also, as they grow, we are also recognizing what part of the category portfolio mix, what part of the consumer brand mix is where we are seeing the best fights to win. Once that gets recognized, we invest harder in that sell and over time, the brand starts to grow much stronger because of that clarity emerging.

Speaker #4: You know, different brands go through their own journeys. Mamaearth has gone through its own journey. The Derma Co. has gone through its own journey.

Speaker #4: And over time, we need to keep reflecting and contextualizing them versus the consumer and how they are evolving. So, each of these brands—the younger brands also, as they grow—we are also recognizing what part of the category portfolio makes what part of the consumer brand mix, and where we are seeing the best rights to win.

Varun Alagh: Each of these brands, the younger brands also, as they grow, we are also recognizing what part of the category portfolio mix, what part of the consumer brand mix is where we are seeing the best fights to win. Once that gets recognized, we invest harder in that sell and over time, the brand starts to grow much stronger because of that clarity emerging.

Speaker #4: And once that gets recognized, you invest harder in that cell and, you know, over time the brand starts to grow much stronger because of that clarity merging.

Speaker #4: So I think each of the brands is in that journey. We just did a packaging, as well as proposition rehash, for Ecological to make it far more relevant for Gen Zs.

Varun Alagh: I think each of the brands is in that journey. We just did a packaging as well as proposition rehash for Aqualogica to make it far more relevant for Gen Z. It is the first brand which is tested on Gen Z claims, and that has shown very good results in terms of how we are seeing the growth for the brand. Similarly, there are other actions we have run top to share, which are planned over the next six to nine months, and you will see those sharpening happening on the brand. I think in case of Vignale, of course, we had clearly got some underlying low-hanging fruits like expansion onto market cases or expansion into other geographies, which we deployed quickly to grow that.

Speaker #4: It's the first brand which is tested on Gen Zs, claimed and that has shown very good results in terms of how we're seeing the growth for the brand, right?

Speaker #4: Similarly, there are other actions around doctor shares which are planned over the next six to nine months, and we'll see those sharpenings happening on the brand.

Speaker #4: So I think in case of Reginald, of course, we had clearly got some underlying handle hanging fruits like expansion onto marketplaces or expansion into other geographies which we deployed quickly to grow that.

Speaker #4: So, for each brand, there is a different strategy which gets crafted, and we test that out. Whenever we see green clips on that, we double down on it.

Varun Alagh: For each brand, there is a different strategy which is crafted, and we test that out and whenever we see green shoots on that, we double down on it. That is the basic playbook that we are taking.

Speaker #4: But that's the basic playbook that we execute.

Speaker #5: Sure. My second question was on the margin. Now, given that you're already at 12 and a half percent normalized EBITDA margin, and there could be front ending of the 15% aspiration, but from a long term, basis, how should we think about the balance between growth investment and margin expansion?

Videesha Sheth: Sure. My second question was on the margin. Given that you are already at 12.5% normalized EBITDA margin, there could be front-ending of the 15% aspiration. From a long-term basis, how should we think about the balance between growth investment and margin expansion? At what point of time would you prioritize reinvesting in the younger brands or the brands which are kind of fading out on the growth profile to get that incremental growth?

Speaker #5: So, at what point in time would you prioritize reinvesting in the younger brands, or the brands which are kind of fading out on the growth profile, to get that incremental growth?

Speaker #4: So honestly, the plan that we have shared as part of our Investor Day assumes the prioritization of growth, and the commitment that we have made already takes into account the new categories or the new brands that we want to build.

Varun Alagh: Honestly, the plan that we have shared as part of our investor day assumes the prioritization of growth over margins. The commitment that we have made already takes into account the new categories or the new brands that we want to build. It is just that, even with that, we know that our core will also continue to grow, and the core will continue to become more profitable, allowing us to actually invest in some of these new categories or new brands that we want to build. Overall, still be able to deliver to the goals that we have committed. The plan that we have shared already assumes that we are going to build young brands into larger franchises. We are going to enter into new categories. It takes all of that into account.

Speaker #4: So it's just that, you know, even with that, we know that our core will also continue to grow, and the core will continue to become more profitable, allowing us to actually invest in some of these new categories or new brands that we want to build.

Speaker #4: But overall, still be able to deliver to the goals that we have committed. So the plan that we have shared already assumes that we are going to build young brands into larger franchises.

Speaker #4: We are going to enter into new categories. So it takes all of that into account.

Speaker #5: Thanks for that. I'll get back in the queue.

Videesha Sheth: Thanks for that. I will get back in the queue.

Speaker #1: Thank you. Our next question comes from the line of Aditya Soman with CLSA. Please go ahead.

Videesha Sheth: Thank you. Our next question comes from the line of Aditya Soman with CLSA. Please go ahead.

Operator: Thank you. Our next question comes from the line of Aditya Soman with CLSA. Please go ahead.

Speaker #6: Hi, good evening, and thanks for the opportunity. Thank you for the clarification on the margins on the slide that you have. So, just to be sure, about 300 to 350 basis points—so it's sort of organic margin improvement.

Aditya Soman: Hi. Good evening, and thanks for the opportunity. Thanks for the clarification on the margins on the slide that you have. Just to be sure, about 300 to 350 basis points was organic margin improvement. Then you have another 100 to 150, which is seasonal, which may not recur from Q2 onwards. Is that the right way to look at this number for this year?

Speaker #6: And then you have another 100 to 150, which is sort of seasonal, which may not recur from Tokyo onwards. Is that the right way to look at this number for this year?

Speaker #4: I think from a year perspective, like we said, right? I mean, while we're saying over five years, we'll improve by 500 basis points, right?

Varun Alagh: I think from a year perspective, it is like we said. While we are saying over five years, we have improved by 500 basis points. If you divide it by average, that comes out to be 100. There will be years where we will do better than that, and this is a year where we will clearly be better than that. At least 150 basis points plus 100 to 200 basis points is what we see us doing over last year and this year. Broadly, that is what we think from a year perspective as well.

Speaker #4: I mean, if you divide it by average, that comes out to be 100. But maybe years where we'll do better than that, and this is an year where we'll clearly be better than that.

Speaker #4: At least 150 basis points plus, right? 100 to 200 basis points is what we see ourselves doing over last year and this year. But yeah, broadly, that's what we think from a year perspective as well.

Speaker #1: Thanks for that sphere.

Aditya Soman: Thanks. No, that is clear. Secondly, you have had obviously very strong growth in general trade and modern retail. We have had this issue in the past where there was an inventory build-up. I see in your slide you have called out that primary and secondary growth are similar. How confident are you that you do not see any of this issue as we saw before?

Speaker #6: And secondly, you've had obviously very strong growth in general trade and modern retail. Now, we've had this issue in the past where there was sort of an inventory buildup.

Speaker #6: I see in your slide you've sort of called out that primary and secondary growth are similar. But how confident are you that you don't see any of the sort of issue as we saw before?

Speaker #4: Extremely confident. We are now tracking every distributor's inventory; our collections are at the highest ever levels. Tracking cash is the best way to sort of ensure you're tracking the health of a distribution system.

Varun Alagh: Extremely confident. We are now tracking every distributor's inventories. Our collections are at highest ever levels. Tracking cash is the best way to ensure you are tracking the health of a distribution system. We do that very clearly. Our distribution system is on less than 30 days of inventory now. With our kind of wide assortment, that is actually very tight to run this. But we have been able to achieve that. All of those factors, in fact, even if you look at retail STRs, our retail STRs are also relatively far healthier than the categories that we operate in. From all of those angles, we are continuously tracking this and extremely confident that this is being built on a fairly healthy distribution system.

Speaker #4: So we do that very clearly. Our distribution system is on less than 30 days of inventory now. And with our kind of wide assortment, that's actually very tight.

Speaker #4: To run with, right? But we have been able to sort of achieve that— all of those factors. In fact, even if you look at retail STRs, our retail STRs are also relatively far healthier than the categories that we operate in.

Speaker #4: So from all of those angles, we are continuously tracking this. And extremely confident that this is being built on a fairly healthy distribution system.

Speaker #1: Thanks. Thanks a lot.

Aditya Soman: Thanks a lot. That was very clear, and I am very impressed with this.

Speaker #6: And that was very clear and very impressive. Thanks.

Speaker #1: Thank you. Our next question comes from the line of Jay Doshi with Kotak. Please go ahead.

Aditya Soman: Thank you.

Operator: Thank you. Our next question comes from the line of Jay Doshi with Kotak. Please go ahead.

Aditya Soman: Our next question comes from the line of Jay Doshi with Kotak. Please go ahead.

Jay Doshi: Yes. Hi, thanks. I have a couple of questions. First one, in terms of the retail outlet reach of 3 lakh. Is this for Mamaearth as well as The Derma Co? If not, then where is The Derma Co in the journey of offline scale-up? If you could give some color of this INR 1,000 crore ARR, what is the split between online and offline ballpark at this point of time for The Derma Co? That's question number one. The second one is, some thoughts on Fluence Pharma acquisition. How do you intend to build the nutraceutical business on that asset and how, ballpark, what should we expect in the next 12 months in that space?

Speaker #6: Yes, hi, thanks. I have a couple of questions. First one: in terms of the retail outlet reach of 3 lakh, is this for Mamaearth as well as The Derma Co.?

Speaker #6: And if not, then where is Dermaco in the journey of offline scale-up? And if you could give some color on the 1,000 crore ARR, what is the split between online and offline, ballpark, at this point of time for Dermaco?

Speaker #6: That's question number one. And the second one is, some thoughts on we want pharma acquisition. How do you intend to sort of build the nutraceuticals business on that asset?

Speaker #6: And how ballpark, what should we expect in the next 12 months?

Speaker #4: Sure. Hi Jay. So on the first question, Jay, the 3 lakh is actually the universe that we are reaching out to according to AC Nelson.

Varun Alagh: Sure. Hi, Jay. On the first question, Jay, the 3 lakh is actually the universe that we are reaching out to according to ACNielsen. That's largely an intersection of the universe, but largely Mamaearth is what is driving that expansion in terms of distribution. The Derma Co is relatively new in this journey, about a year old into getting into offline, but has seen very good traction in offline, especially modern trade and now in GT as well. In general trades, we are already there in close to 50,000 outlets. From a contribution perspective, the latest contribution, 80% still online, 20% is coming from offline, which is GT plus MT for The Derma Co, is how we are seeing that shape. On your second question, Honasa Health is the subsidiary that we have created.

Speaker #4: That's largely an intersection of the universe, but largely Mamart is what is driving that expansion in terms of distribution. Dermaco is relatively new in this journey, about an year old into sort of getting into offline, but has seen very good traction in offline, especially modern trade and now in GT as well.

Speaker #4: In general trade, we are already there in close to 50,000 outlets. And from a contribution perspective, our latest contribution 80% still online, 20% is coming from offline, which is GT plus MT for Dermaco.

Speaker #4: That is how we're seeing that shape. On your second question, I think Honasa Health is the subsidiary that we have created. We are clearly thinking very strategically about this whole space and category.

Varun Alagh: We are clearly thinking very strategically about this whole space and category. We believe nutrition and wellness is going to be a decadal opportunity, like we are in personal care. We will get to create brands which stand for different niches, different kind of payoffs, appealing to different kind of life stages over the next 10 years in that space, which is why we've chosen to create a separate company around it. Now, within that, we will do different propositions. Fluence is one proposition that we announced where we're still in the condition precedent process and the diligence process, which is getting completed. As it completes is when we will talk about it getting integrated.

Speaker #4: We believe nutrition and wellness is going to be a decadal opportunity like beauty and personal care. And we will get to create brands which stand for different niches, different kind of payoffs.

Speaker #4: Appealing to different kind of life stages over the next 10 years in that space. Which is why we have chosen to sort of create a separate company around it.

Speaker #4: Now, within that, we will do different propositions. Fluence is one proposition that we announced where we're still in the condition precedent process and the diligence process, which is getting completed as it completes is when we will sort of be able to talk about it getting integrated.

Speaker #4: But outside of that as well, we continue to think about potential organic propositions that we can shape over time. To take on the category of nutrition and wellness.

Varun Alagh: But outside of that as well, we continue to think about potential organic propositions that we can shape over time to take on the category of nutrition and wellness, which we believe is a multi-billion opportunity in India.

Speaker #4: Which we believe is a multi-educative opportunity.

Speaker #6: So, is it right to assume that you will probably acquire some more brands in this space over time as you build the portfolio in nutrition and wellness?

Jay Doshi: Is it right to sort of assume that you will probably acquire some more brands in this space over time as you sort of build the portfolio in nutrition and wellness, or will it be organic from this point?

Speaker #6: Or will it be organic from this point?

Varun Alagh: Like we have always mentioned, Ajay, our priority is always to find things that we can do organically. Even in this case, the priority will be to build the R&D capability to do things organically. We have already hired the right kind of capabilities to actually be able to go after that organically. Of course, if we come across good inorganic opportunities where we are buying not only great brands but also bolstering our capability in this space as an organization, we will continue to be on the lookout for this.

Speaker #4: Like we have always mentioned that our priorities always do find things that we can do organically. And even in this case, the priority will be to build the R&D capability to do things organically.

Speaker #4: We have already, sort of, hired the right kind of capabilities to actually be able to go after that organically. But, of course, if we come across good inorganic opportunities, where we are buying not only great brands but also bolstering our capability in this space as an organization, we will continue to be on the lookout.

Speaker #6: Sure. Thank you so much. I'll get back in the queue.

Jay Doshi: Sure. Thank you so much. I will get back in the queue.

Speaker #1: Thank you. The next question is from the line of Umang Shah with Banyantree Advisors PMS. Please go ahead.

Jay Doshi: Thank you. The next question is from the line of Umang Shah with Banyan Tree Advisors PMS. Please go ahead.

Operator: Thank you. The next question is from the line of Umang Shah with Banyan Tree Advisors PMS. Please go ahead.

Umang Shah: Hi, sir. Thank you for taking my question. Great performance. Sir, my question was, why has it been that fragrance as a segment has not been cracked by any of the large players in India? The second part to it was, if my memory serves me right, we had done a foray in fragrances through Mamaearth some time back, and we discontinued it. So what were your learnings from the same?

Speaker #6: Hi sir. Thank you for taking my question. Great performance. So my question was, why has it been that fragrance are a segment has not been cracked by any of the large players in India?

Speaker #6: What have been the challenges? And the second part to it was, if my memory serves me right, we had done a foray in fragrances through Mamaearth some time back.

Speaker #6: And we discontinued it. So what were the learnings from the thing?

Varun Alagh: Yeah, so let me answer these two questions. Actually, the second question first, and probably that will answer the first. So, there is a certain world that Mamaearth as a brand operates in. There are certain categories where as a brand it has the right to win. While when we did our early research, we felt that fragrance was a category where the brand can extend into. But with early reads that we had with consumers, we were not happy in terms of the PMF we achieved, so we shut down. Those are experiments that we keep doing. But like we have under Mamaearth, we have not called out that as a go-to-strategy.

Speaker #4: Yeah. So let me answer these two questions—actually, the second question first, and probably that will answer the first. So, there is a certain world that Mamaearth as a brand operates in.

Speaker #4: There are certain categories where as a brand, it has the right to win. While when we did our early research, we felt that fragrance was a category where the brand can extend into.

Speaker #4: But with early reads that we had with consumers, we were not happy in terms of the PMFA achieved. So we shut down. And those are experiments that we keep doing.

Speaker #4: But like we have under Mamart, we have not called out that as a gold standard. In fact, called out as a gold standard or focus category.

Varun Alagh: In fact, none of the brands have that called out as a go-to-strategy or focus category because we realized that fragrance brands will need to be fragrance first, if we want to win in the fine fragrance market in the long term. Once you win in fine fragrances markets, then of course your ability to extend into other fragrant categories like body washes, body lotion, body care actually become relevant and multiple examples exist globally where brands have been able to do that. But starting with Fragrances as a core is essential for you to win in fine fragrance. It is what we learned from that experiment, which is why we have chosen to launch a specific brand which are targeted at gender-specific fragrances and building brands like that. Picking is where we are starting this journey with.

Speaker #4: Because we realized that fragrance brands will need to be fragrance first. If we want to win in the fine fragrance market, in the long term.

Speaker #4: Once we win in the fine fragrance market, then of course your ability to extend into other fragrant categories like body washes, body lotions, and body care actually becomes relevant. Multiple examples exist globally where brands have been able to do that.

Speaker #4: But starting with fragrances as the core is essential for you to win in brand fragrance market is what we learned from that experiment, which is why we have chosen to launch specific brands which are targeted at gender-specific fragrances and building brand like that.

Speaker #4: And picking is where we are sort of starting this journey with. It also took us time to be build the product capabilities internally, to be honest.

Varun Alagh: It also took us time to build the product capabilities internally, to be honest. Any category that you want to succeed in, we have clearly learned that our own strong R&D capabilities, understanding the science of load sharing, how do you extend life of fragrances on skin, is also critical. So that is the time that we spent over the last few years after shutting down that category, now we are actually building this journey for us. If you look at the India landscape, then yes, probably you will not come across FMCG companies who have done fragrances because there are no purely B2C companies like we said. But if you look at B2C purely companies globally, you look at L'Oréal, you look at Estée Lauder, and fragrances is one of the largest business areas that they have as a category.

Speaker #4: Any category that you want to succeed in, we have clearly learned that our own strong R&D capabilities, understanding the science of notes, layering, how do you extend life of fragrances on the skin is also critical.

Speaker #4: So that's the time that we spent over last two years after shutting down that category in Mamart and actually building this internally for us.

Speaker #4: If you look at the India landscape, then yes, probably you won't come across FMCG companies who have done fragrances because there are no purely BTC companies that exist yet.

Speaker #4: But if you look at BTC purely companies globally, you look at L'Oréal, you look at Estée Lauder, fragrances is one of the largest business areas that they have as a category.

Varun Alagh: But if you look at B2C purely companies globally, you look at L'Oréal, you look at Estée Lauder, and fragrances is one of the largest business areas that they have as a category.

Speaker #4: And which is why I believe any pure play FMCG companies needs to have a strong fragrance play over time. It not only gives them entry into a relevant category, but also builds internal capabilities to do fragrance well in other categories as well.

Varun Alagh: Which is why I believe any pure play FMCG company needs to have a strong fragrance play over time. It not only gives them entry into a relevant category, but also builds internal capabilities to do fragrance well in other categories as well. That is the way we are shaping up.

Speaker #4: And that's the way we are shaping it up.

Speaker #6: Understood, understood. Very useful. Second question was, our e-commerce growth was 20%. Can you break it down between our own website versus quick commerce and e-commerce?

Umang Shah: Understood. Very useful. Second question was, our e-commerce growth was 20%. Can you break it down between our own website versus quick commerce and e-commerce?

Speaker #4: Yeah, no, we usually don't give breakdowns of different channels.

Varun Alagh: No, we usually do not give breakdowns of different channels.

Speaker #6: Okay. Okay, not a problem. Thank you so much. All the best.

Umang Shah: Okay. Not a problem. Thank you so much. All the best.

Speaker #1: Thank you. Ladies and gentlemen, to ask a question, you may please press star one on your touch-tone telephones. Participants viewing the webcast may enter your question in the 'Ask a Question' field.

Umang Shah: Thank you. Ladies and gentlemen, to ask a question, you may please press star and one on your touchtone telephones. Participants viewing the webcast may enter your question in the ask a question field on the screen. Our next question comes from the line of Nitin Shakdher with Green Capital Single Family Office. Please go ahead.

Operator: Thank you. Ladies and gentlemen, to ask a question, you may please press star and one on your touchtone telephones. Participants viewing the webcast may enter your question in the ask a question field on the screen. Our next question comes from the line of Nitin Shakdher with Green Capital Single Family Office. Please go ahead.

Speaker #1: On the screen. Our next question comes from the line of Nithin Shaktir with Green Capital Single Family Office. Please go ahead.

Nitin Shakdher: Hi. Good evening. This is Nitin Shakdher from the Green Capital Single Family Office. Congratulations to Varun, Gazal, and Raman for stunning performance of a tough quarter. My question is more related to, in my conversations as an investor with many large FMCG companies that are in personal care, they have indicated huge hits to their bottom lines in terms of either the cost of packaging or the cost of crude oil derivative products, or the cost of certain logistics, which has increased over the last quarter, and it is showcasing in the results. I do not see that impact happening in Honasa, so I would just like to understand, what has the company done specifically in terms of offsetting the costs for this quarter?

Speaker #6: Hi. Good evening. This is Nithin Shaktir from the Green Capital Single Family Office. Congratulations to Varun, Ghazal, and Ramanpreet for stunning performance of a tough quarter.

Speaker #6: And my question is more related to, in my conversations as an investor with many large FMCG companies that are in personal care, they've indicated a huge hit to their bottom lines.

Speaker #6: In terms of either the cost of packaging or the cost of crude oil derivative products, or the cost of certain logistics, which has increased over the last quarter.

Speaker #6: And it's showcasing in the results. Now, I don't see that impact happening in Honasa. So I would just like to understand what have the companies done specifically in terms of setting the costs for this quarter?

Speaker #6: Because it seems very impressive that you probably only had an increase of 30–40 crores, rather than anything more than that, on the cost of raw materials.

Nitin Shakdher: Because it seems very impressive that you probably only had an increase of 30, 40 crores rather than anything more than that on the cost of raw materials.

Speaker #5: Yeah. Hi Nithin. Raman Desai. Let me take this one. Yeah. So I think like you rightly pointed out, of course, I think the crude oil price has been an inflationary trend given the best ratio of all.

Ramanpreet Sohi: Yeah. Hi, Nitin. Raman this side. Let me take this one. I think, like you rightly pointed out, of course, I think the crude oil price has been an inflationary trend given the West Asia war. I think as for other personal care companies, we have also seen our pricing index for packaging materials specifically going up. Given that we were able to actually do a good job with the inventory management in Q1, we did not see the implication of that in our financials very seriously, especially on the gross margin side. I think the real impact of it will be Q2, but given that we have actually taken calibrated price increases towards the end of Q1, we will be able to offset any such inflationary impact on us from a government perspective. I think that is how we have been able to manage it.

Speaker #5: I think as for other personal care companies, we've also seen our pricing index for packaging materials, specifically going up. And given that we were able to actually do a good job with the inventory management in Q1, we did not see the implication of that in our financials that you see it, especially on the gross margin side.

Speaker #5: And I think the real impact of it will be Q2. But given that we've actually taken calibrated price increases towards the end of Q1, we'll be able to offset any such inflationary impact on the government perspective.

Ramanpreet Sohi: I think the real impact of it will be Q2, but given that we have actually taken calibrated price increases towards the end of Q1, we will be able to offset any such inflationary impact on us from a government perspective. I think that is how we have been able to manage it.

Speaker #5: So, I think that's how we've been able to manage it. I think we don't see any impact on our gross margin to fund, specifically from this one.

Ramanpreet Sohi: I think we do not see any impact on our gross margin, but specifically from this part. Hopefully, I think as we move into the second half of the year, some of these pieces, the inflation trend reverses and we will probably see some benefits coming into the P&L.

Speaker #5: And hopefully, I think as we move into the second half of the year, some of these pieces—the inflation trend—reverses, and we'll probably see some benefits.

Speaker #5: I think it will appear.

Speaker #6: Okay. That's clear. Thanks a lot. And my second question is, I'm not sure if Ghazal is on the call and maybe Varun can take this if she's not there.

Nitin Shakdher: Okay. That is clear. Thanks a lot. My second question is, I am not sure if Ghazal is on the call and maybe Varun can take this if she is not there. In terms of new categories, which you are obviously looking at as nutraceuticals or fragrances, are you also looking at certain micro trends within a large category? For example, there is a trend of looksmaxing for men, and within men in the hair care category, hair fiber brands like Toppik are doing large global annual revenue. Would you also sort of look into micro category niche spends or product development within the larger category? Is that interesting for the brand? Just wanted to have a sense of innovation in terms of the product development.

Speaker #6: Now, in terms of new categories, which you're obviously looking at as nucleosidicals or fragrances, are you also looking at certain micro trends within a large category?

Speaker #6: So for example, there is a trend of looks maxing for men. And within men, in the hair care category, hair fiber brands like Topix are doing large global annual revenue.

Speaker #6: Would you also sort of look into micro category, niche spends, or product development within the larger category? Is that interesting for the brand? I just wanted to have a sense of innovation in terms of the product development.

Ghazal Alagh: Hi. Thank you for that question. I think we keep looking. We do keep looking at all of these trends. The teams are aware, we discuss it internally. But I think we have also aligned on a focused category strategy for the company. There is-

Speaker #3: Hey. Hi. Thank you for that question. I think we keep looking. We do keep looking at all of these trends. The themes, we are aware.

Speaker #3: We discuss it internally. But I think we've also aligned on a focus category strategy for the company. So there is a lot of weightage given to what is it that we want to build next, where we can create an impact rather than just hopping onto trends.

Varun Alagh: There is a lot of weightage given to what is it that we want to build next, where we can create an impact rather than just hopping on to trends. So through that evaluation, while we continue to be very focused on our core categories that we have defined, there is a lot of experimentation that happens across brands. You will see brands like VEdance, et cetera, trying new trends, be it layering, be it their fiber thing. But unless proven, we don't invest big amounts in that.

Ghazal Alagh: There is a lot of weightage given to what is it that we want to build next, where we can create an impact rather than just hopping on to trends. So through that evaluation, while we continue to be very focused on our core categories that we have defined, there is a lot of experimentation that happens across brands. You will see brands like VEdance, et cetera, trying new trends, be it layering, be it their fiber thing. But unless proven, we don't invest big amounts in that.

Speaker #3: So, through that evaluation, while we continue to be very, very focused on our categories that we have defined, there is a lot of experimentation that happens across brands.

Speaker #3: I mean, you will see brands like Vibrance, etc., trying the new trends, BPR in these hair fiber things, etc. But unless proven, we don't invest big amounts in that.

Speaker #6: Okay, understood. It's a very impressive turnaround and extremely great results in spite of a tough quarter. I'm sure your third-party suppliers are getting squeezed by the company, but I'm also sure the company is doing a great job on the bottom line, especially in terms of raw material cost.

Nitin Shakdher: Okay, understood. It's a very impressive turnaround and extremely great results in spite of a tough quarter. I'm sure your third-party suppliers are getting squeezed by the company, but I'm sure the company's doing a great job on the bottom line, especially in terms of the raw material cost. So all the best. Thank you.

Speaker #6: So all the best for the year. Thank you.

Speaker #1: Thank you. Our next question comes from the line of Nithin with HDFC Securities. Please go ahead.

Nitin Shakdher: Thank you. Our next question comes from the line of Nitin with HDFC Securities. Please go ahead.

Operator: Thank you. Our next question comes from the line of Nitin with HDFC Securities. Please go ahead.

Speaker #6: Yeah. Hi. Thanks for taking my question. Yeah. So in general trade, my first question pertains to general trade. So we have seen consistent growth here.

[Analyst] (HDFC Securities): Hi. Thanks for taking my question. My first question pertains to general trade. We have seen consistent growth here. Just wanted to understand how is the growth with our old distributors, like whom we have not replaced. Basically, this is in the context like, what is the growth is or the new distributors are fixing issues in the newer regions. Just wanted to see how is the like-to-like growth for Mamaearth brand or maybe in the offline where you have the existing distributors.

Nitin Gupta: Hi. Thanks for taking my question. My first question pertains to general trade. We have seen consistent growth here. Just wanted to understand how is the growth with our old distributors, like whom we have not replaced. Basically, this is in the context like, what is the growth is or the new distributors are fixing issues in the newer regions. Just wanted to see how is the like-to-like growth for Mamaearth brand or maybe in the offline where you have the existing distributors.

Speaker #6: So just wanted to understand how is the growth with our old distributors, like whom we have not replaced. So basically, this is in the context like what is the growth is or like the new distributors are fixing issues in the newer region.

Speaker #6: So just wanted to see how is the like-to-like growth for Mammoth brand or maybe in the offline where you have the existing distributors.

Speaker #5: Actually, most of this growth is from our existing geographies only. So I mean, whether it's an existing distributor or a new distributor, it doesn't matter. What matters is, is it the same geography that we are talking about?

Varun Alagh: Actually, most of this growth is from our existing geographies only. So existing distributor or new distributor does not matter. What matters is in the same geography that we are talking about. As part of new project, in fact, we have further narrowed our direct distribution from 100 cities to focusing on 100 cities. So all of the growth that you see is coming on the back of that focused distribution strategy. Of course, within those geographies, with our distribution partners, we are expanding to more stores. But it is coming from the same sort of new geography itself.

Speaker #5: And as part of new project, in fact, we further narrowed our direct distribution from like 100 deliveries to focusing on 100 cities. So all of the growth that you see is coming on the back of that focused distribution strategy.

Speaker #5: And of course, within those geographies, with our distribution partners, we are expanding to more stores, but it is coming from the same sort of geography itself.

Speaker #6: And would you be able to sort of comment on how is this GT growth for brand-specific like Mammoth?

Varun Alagh: Would you be able to comment on how is this GT growth for a brand specific like Mamaearth?

Nitin Gupta: Would you be able to comment on how is this GT growth for a brand specific like Mamaearth?

Speaker #5: The GT growth for brand Mammoth will also be more than, actually, the average growth that we have monitored. It's one of the drivers of brand growth.

Varun Alagh: The GT growth for brand Mamaearth will also be more than actually the average growth that we have. It is one of the drivers of our brand.

Speaker #6: Okay. Yeah. That's hard thing to note. Second question is pertaining to our younger brands. If I adjust for this male grooming, how would be the growth?

Varun Alagh: Okay. That is heartening to note. Second question is pertaining to your younger brands. If I adjust for this male grooming, how would be the growth? Also if you can throw some light around how is the performance of Aqualogica and how would be the ARR currently for that brand.

Nitin Gupta: Okay. That is heartening to note. Second question is pertaining to your younger brands. If I adjust for this male grooming, how would be the growth? Also if you can throw some light around how is the performance of Aqualogica and how would be the ARR currently for that brand.

Speaker #6: And also, if you can throw some light around how is the performance of Ecologica and how would be the ARR currently for that brand?

Speaker #5: So if you remove the BTM ventures acquisition, the young brands are still growing at 30% plus. We do not further disclose numbers for all the brands, right?

Varun Alagh: If you remove the BGN Ventures acquisition, the young brands are still growing at 30% plus. We do not further disclose numbers for all the brands, otherwise people start getting too expertly detailed and comparatively considering situations. Aqualogica, like I said, is doing very well, especially after the restyling relaunch that we have done in Q1. We are very confident of being able to continue to scale that brand and make it our next big bet in Honasa.

Speaker #5: Otherwise, we will start getting into explaining detailed and comparatively sensitive information. But Ecologica, like I said, is doing very well, especially after the restage and relaunch that we have done in Q1.

Speaker #5: And we are very confident of being able to continue to scale that brand and make it our next big bet on another.

Speaker #6: Thanks a lot. But just wanted to take further on this thing. If you can highlight in terms of this proposition, what we have with the Ecologica, how overall the consumer cohort, the demand is evolving in that space, not specific to the brand, but specific to the space, if you can highlight.

Varun Alagh: Thanks a lot. Just wanted to take further on this thing. If you can highlight in terms of this proportion, what we have with the Aqualogica, like how overall the consumer cohort, the demand is evolving in that space. Not specific to the brand, but specific to the space, if you can highlight.

Nitin Gupta: Thanks a lot. Just wanted to take further on this thing. If you can highlight in terms of this proportion, what we have with the Aqualogica, like how overall the consumer cohort, the demand is evolving in that space. Not specific to the brand, but specific to the space, if you can highlight.

Speaker #5: So Ecologica is a brand which is targeted at Gen Z. And Gen Z is already becoming almost a 45% buying cohort in BPC categories, especially in e-commerce channels.

Varun Alagh: Aqualogica is a brand which is targeted at Gen Z. Gen Z already is becoming almost 45% buying cohort in BPC categories, especially in e-commerce channels. That's where the brand is completely focused on and will continue to focus. I think we are very confident that given the sharpness of the brand and the relevance of that category as a buying cohort in the lockdown, that's what we are betting the brand on.

Speaker #5: And that's where the brand is completely focused on and will continue to focus to be. So I think we are very confident that given the sharpness of the brand and the relevance of that TG as a buying cohort in the long term, that's what we are betting the brand on.

Speaker #6: Sure. Thanks a lot, and all the very best.

Varun Alagh: Sure. Thanks a lot, and all the very best.

Nitin Gupta: Sure. Thanks a lot, and all the very best.

Speaker #1: Thank you. Our next question is from the line of Jay Doshi with Kota. Please go ahead.

Varun Alagh: Thank you. Our next question is from the line of Jay Doshi with Kotak. Please go ahead.

Operator: Thank you. Our next question is from the line of Jay Doshi with Kotak. Please go ahead.

Speaker #6: Thanks for the follow-up opportunity. First question is on Mama Earth. Is the growth well-balanced across online and offline channels, or is it largely driven by offline channel only?

Jay Doshi: Thanks for the follow-up opportunity. First question is on Mamaearth. Is the growth well-balanced across online and offline channels, or is it largely driven by offline channel only?

Speaker #5: Jay, both are strong double digits.

Varun Alagh: Jay, both are strong double digits.

Speaker #6: Okay. Thank you. Second is, can you sort of talk a little bit about I know there is a slide, but Rosemary shampoo as well as rice water face wash, these are products that have been around for a while.

Jay Doshi: Okay. Thank you. Second is, can you sort of talk a little bit about, I know there is a slide, but Rosemary shampoo as well as Rice water face wash. These are products that have been around for a while. Are there any other new products which probably have not crossed INR 50 crore ARR, but where you think can drive the next leg of growth for Mamaearth, which early success gives you confidence that some of those products could be INR 50 crore, INR 100 crore ARR. Anything in the last six months or nine months that has been successful that you are launching under Mamaearth?

Speaker #6: Are there any other new products which probably have not crossed 50 crore ARR, but where you think can drive the next leg of growth of for Mama Earth, which early success gives you confidence that some of those products could be 50 crore or 100 crore ARR?

Speaker #6: Anything in the last six months or nine months that has been successful that you've launched under Mamaearth?

Speaker #5: Yeah. Firstly, Jay, I think for us, rice as a franchise, itself can become a 500 crore franchise is what we believe, right? Rosemary as a shampoo franchise itself can become a 250 crore franchise in the next three years, we believe.

Varun Alagh: Firstly, Jay, I think, for us, Rice as a franchise itself can become an INR 1,000 crore franchise, is what we believe. Rosemary, as a shampoo franchise, itself can become an INR 200 crore franchise. So these franchises, given the partitions and categories that they operate in, themselves have a long way to go in terms of the market share that they can gain. They both remain at single-digit market shares as franchises. So there is a lot more room there. From a new things perspective, the three, four things that I would talk about, I think moisturizers is something that we are trying to build in summer, and that stuff now getting into that stage where it is close to that INR 200 crore ARR. We are very confident of how we will execute that in winter. Sunscreens, Vitamin B3 Glow Sunscreen is something which we saw do really well in this summer.

Speaker #5: So these franchisees, given the partitions and categories that they operate in themselves, have a long way to go in terms of the market share that they can gain, right?

Speaker #5: They both remain at single-digit market shares as sort of franchisees. So there is a lot more headroom there. But from a new things perspective, the three, four things that I will talk about, again, moisturizers is something that we are trying to build in Mama Earth, and that's sort of now getting into that stage where it is close to that 50 crore ARR.

Varun Alagh: They both remain at single-digit market shares as franchises. So there is a lot more room there. From a new things perspective, the three, four things that I would talk about, I think moisturizers is something that we are trying to build in summer, and that stuff now getting into that stage where it is close to that INR 200 crore ARR. We are very confident of how we will execute that in winter. Sunscreens, Vitamin B3 Glow Sunscreen is something which we saw do really well in this summer.

Speaker #5: We're very confident about how we'll execute that in winter. Sunscreens, vitamin D, Daily Glow sunscreen is something which we saw do really well this summer.

Speaker #5: So that's another candidate for becoming the next 100 crore sort of East. And we've also in our core categories of face wash and shampoo, opened newer partitions and while they're younger, but we are very confident in the medium term, we'll see them becoming also 100 crore franchisees over the next two to three years.

Varun Alagh: That is another candidate for becoming the next INR 100 crore piece. We have also, in our core categories of face wash and shampoo, opened newer partitions. While they are younger, we are very confident in the medium term, we will see them becoming also INR 100 crore franchises over the next 2 to 3 years. One is in acne, where we have Tea Tree Face Wash that we are focusing on building. Second is in dandruff, where we have Lemon Anti-Dandruff Shampoo that we are focusing on building. So multiple partitions like this, that which we are confident of, into becoming the next in view of those. Even the core continues to have a long way to go in terms of how large it can become.

Speaker #5: One is in acne, where we have the Tea Tree face wash that we are focusing on building, and second is in dandruff, where we have the Laminilo shampoo that we are focusing on building.

Speaker #5: So multiple partitions like this, right, which we'll contribute of into becoming the next engines of growth. But even the core continues to have a long way to go in terms of how large it can become.

Speaker #6: Understood. The next question is for Raman. So is it usually this quarter is 110 crore EBITDA and if I exclude the one-time component, it's close to 100 crores.

Jay Doshi: Understood. My next question is for Raman. Usually, this quarter is INR 110 crore EBITDA, and if I exclude the one-time component, it is close to INR 100 crores. In the past, what we have seen is, probably Q2 is similar to Q1 or slightly lower, but then H2 quarterly EBITDA generally tends to be much higher. In that context, the guidance that you have given, both in terms of margins as well as from the growth or EBITDA growth seems to be a little too conservative. So what am I missing? Are you seeing any risk or is there any phasing of A&P spends that you are expecting during the course of the year? Can you explain the margin guidance a little better?

Speaker #6: In the past, what we have seen is probably 2Q is similar to 1Q or slightly lower, but then second half quarterly EBITDA generally tends to be much higher.

Speaker #6: So in that context, the guidance that you've given both in terms of margins as well as probably growth, or EBITDA growth, seems to be a little too conservative.

Speaker #6: So what am I missing? Are you seeing any risk, or is there any sort of other is there any phasing of AMP spends that you're expecting during the course of the year?

Speaker #6: Can you explain the margin guidance a little better?

Speaker #5: Yeah. So I think, Jay, as you I think Q1, the adjusting for the one-time non-recurring piece numbers come around 212 odd percent. And of course, like we were talking about earlier, there is clearly a seasonal leverage also as part of this.

Ramanpreet Sohi: Yeah. I think, Jay, Q1, adjusted for the one time non-recurring piece, the numbers come around to 12-odd percent. Of course, like we were talking about earlier, there is clearly a seasonal leverage also as part of this. As we move ahead, typically Q2, if you want seasonality, the summer category seasonality goes away and then sequentially the scale kind of dips a little. Having said that, of course, like we have said in the past, our focus is growth first. I think mindset is really growth first. Hence, I think if there are opportunities for us where we have to reinvest and target growth, I think that is how we will approach the rest of the year.

Speaker #5: Now, as we move ahead, typically in Q2, the Q1 seasonality is somewhat—category seasonality goes away, and then, sequentially, the scale kind of dips a little.

Speaker #5: Having said that, of course, like we've said in the past, our focus is growth first. I think the mindset is clearly growth first. And hence, I think if there are opportunities for us where we'll have to reinvest and target growth, that's how we will approach the rest of the year.

Speaker #5: And hence, our focus is to ensure that the growth continues and sustains, and it's more about how the margin profile needs to— we are looking at a 4- to 5-year ambition from a margin profile perspective.

Ramanpreet Sohi: Our focus is to ensure that the growth continues and sustains. It is more about how even a margin profile needs to. We are looking at a four to five-year ambition from a margin profile perspective. As Parmi said, 100 to 150 basis is what we target. If there is anything that we need to reinvest to fuel the growth and make the business more sustainable from a long-term perspective, we will continue to do that. That is how we will sort of approach the rest of the year.

Speaker #5: And like Varun said, 100 to 150 pips is what we target. And if there is anything that we need to reinvest to fuel the growth and make the business more sustainable from a long-term perspective, we'll continue to do that.

Speaker #5: And hence, that's how we will sort of approach the rest of the year.

Speaker #6: Thank you so much. Congratulations on good performance and wish you the best for the year.

Jay Doshi: Thank you so much. Congratulations on good performance, and wish you the best for the.

Speaker #5: Thank you.

Varun Alagh: Thank you.

Ramanpreet Sohi: Thank you.

Speaker #4: Thank you. Participants to ask a question, you may please press star and one at this time. Those watching the webcast may enter the text question in the ask a question field below the screen.

Varun Alagh: Thank you. Participants, to ask a question, you may please press star and one at this time. Those watching the webcast may enter their text question in the Ask a Question field below the screen. Ladies and gentlemen, we will take that as our last question of today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Operator: Thank you. Participants, to ask a question, you may please press star and one at this time. Those watching the webcast may enter their text question in the Ask a Question field below the screen. Ladies and gentlemen, we will take that as our last question of today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Speaker #4: Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to the management for closing comments.

Speaker #4: Over to you, sir.

Speaker #5: Thank you so much, everyone, for dialing in. We look forward to you again in the next quarter results. Thank you.

Varun Alagh: Thank you so much everyone for dialing in. We look forward to meeting you again in the next quarter results. Thank you.

Speaker #4: Thank you. On behalf of Honasa Consumer Limited, that consume I'm sorry, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

Varun Alagh: Thank you. On behalf of Honasa Consumer Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

Operator: Thank you. On behalf of Honasa Consumer Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.

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