Bajaj Consumer Care Limited (533229) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Bajaj Consumer Care Q1 FY '21 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. Vismaya Agarwal from ICICI Securities. Thank you, and over to you, sir.

Thank you, Vikram. Good morning, everyone. It is a pleasure to host the Q1 FY '21 Conference Call of Bajaj Consumer Care. We have with us today from the management, Mr. Jaideep Nandi, Managing Director; Mr. D.K. Maloo, Chief Financial Officer; and Mr. Kushal Maheshwari, Head Treasury and Investor Relations. Now over to the management for their opening remarks, and we can go into Q&A post that. Over to you, sir.

Thank you, Vismaya. This is Jaideep Nandi here, and I am joined by my colleagues: Mr. D.K. Maloo, the CFO; Mr. Kushal Maheshwari, Head of Treasury and Investor Relations as well as some of my colleagues from our management committee. At the very outset, I hope and wish that all of you and your families are keeping safe and healthy. The quarter has started with an uncertain and unpredictable environment with the proliferation of COVID-19, as all of you are aware. The company's performance was severely impacted by the lockdown, and we witnessed significant disruptions in the first fortnight of April when our business came to a complete standstill and all our offices, depots and manufacturing locations remained closed. By end April, we started. And by May and June, the company has been able to steadily revive its operation and has reverted to near-normal business in just 2 months. The company reported a sales turnover of INR 191 crores for the quarter, with a decline of 17.6% over the same quarter of previous years. The EBITDA for the quarter was at INR 58.25 crores, a decline of 19% against the previous year. And the EBITDA to sales ratio was at 30.4%, which is a decline of 50 basis points versus the EBITDA reported in the last year's same quarter. The gross margin was at 63.6% as against 67 -- 66.7% in Q1 '20. The margin drop was due to adverse impact of the product mix which included the launch of sanitizer range during the quarter. The LLP prices have softened in this quarter. And if these pricing levels continue, the benefit should be visible in raw material cost going forward. The EBITDA margins remained healthy on the back of a significant drop in A&SP cost, advertising and sales promotion spend, as we were off-air from April to mid-June. As you would remember from mid-March, we have been off-air. So for 3 months, we were off-air. Since then, our spends in this area have been restored to erstwhile level, and we continue with that. In other overheads, there were savings in traveling and administration expense as the entire team was largely working from home. The PAT for the company was at INR 54.19 crores against INR 58.65 crores during the corresponding quarter of the previous year. The PAT as a percentage to sales improved to 28.3%, which was led by higher income from treasury as well as reduction in income tax rate. The hair oil industry continues to see a severe sequential slowdown. Till March 2020, the growth rate in the hair oil market was 2.8%, the MAT growth that is, which declined sharply in April and May, 50% and 25%, respectively. And the growth rate during this 2-month cumulative period in value terms has been 38% decline and volume decline of 33%. The down-trading is clearly visible as the consumer preference is moving towards the low-cost hair oils as against premium hair oils, given the prevailing market conditions. Bain & Company, who were our consultants partnering us for incrementing and accelerated growth strategy in hair oils for the company, have done a comprehensive job in terms of state-level partitioning and assortment of our focus Hindi-speaking markets. The team now has the inputs for execution of the strategies, which is already being currently contextually executed and will continue to be done so in the future. Our approach during the quarter has been to maximize opportunities that were available to us. Ensuring availability of our products in both rural and urban markets was obviously our first priority. We also looked at focusing on specific channels and geographies, which we thought would be relevant during this period and also looked at leveraging new opportunities that have arisen during COVID-19. During the lockdown in April, the company and all its employees rallied behind the frontline sales more in the second quarter, if I were to be precise, the second half of the month, to connect with the channel partners in the system. At one time, more than 40,000 calls were being made per day to all our customers that is channel partners, assuring them of company support and service. The company in the meanwhile also assured all its employees that there would be no job losses due to the ongoing pandemic. When business resumed by end April, the company provided adequate PPE gear and ensured that all our sales force who were working in the market and our factory personnel strictly adhere to the safety norms. One thing that became apparent during the early stages of lockdown itself, which was later borne out by the Nielsen data was that the rural markets have been far less impacted than the urban markets. And as most containment zones are in the urban centers and significant number of large wholesale mandis were shut, while many rural markets currently remained open. During April and May, the total hair oil offtake decline has been 44% in the urban market as compared to only 30% in rural. So to ensure that the rural distribution reach is dialed up, the company scaled up its van operations in May and June. Currently, overall, we are reaching out to more than 50,000 villages, that is including the vans, across 15 states. This has helped increase our direct reach and helped service the end customers better. The company is supporting the initiative with advertising spends in key rural markets through TV, which started since mid-June as well as digital marketing. For the Modern Trade channel, this was a tough quarter. The business got impacted due to closure of malls and hypermarket stores for major part of the quarter in most metro cities. However, we expect growth from this channel in future quarters to return when urban markets normalize. E-commerce continued to remain a small part of our portfolio, while e-commerce sales saw good growth in the quarter, the absolute numbers still remain relatively insignificant. This will remain an area of focus for the company going forward. No significant development happened in the international business. The borders remain shut for major part of the quarter impacting the business. We expect export orders to start trickling in as the situation is slowly coming to normal. And our main markets, as you would be aware, are basically the Gulf, in the Middle East, Bangladesh and Nepal. We had launched our Nomarks hand sanitizer in retail in 5-liter pack sizes in month of April, which we had presented during the last investor call as a tactical opportunity. We added the 500 ml pack based on market demand in June. And additionally, a new product, the multipurpose sanitizer in 5 liters was also introduced in June to cater to institutional demand. We believe that the uncertainty due to COVID-19 will continue to support the demand for sanitizers in the long -- in the medium term. The company has gone live with SAP HANA and SuccessFactors, which again, we have presented last time. This is an area we will continue to work on basically to strengthen the systems and processes in the organization as well as work on control and governance as a practice for the company for the next few quarters. Our understanding in the current scenario is that flexibility, adaptability, nimble-footedness will take precedence over structured long-term planning and execution. As we move into the fifth month of a COVID-gripped world, it looks like the uncertainty will last for some time to come. And as we speak, July month is already seeing a surge of lockdowns across the country, which clearly might have an impact on sales. We need to keep revaluating our plans regularly and look for contextual solutions during these uncertain times. Parallelly, we'll also continue to build our long-term strategic plans in the coming quarters as we look towards that longer term and a more stable environment. So with that, I would like to end my address and open the floor to questions.

[Operator Instructions] We have a first question from the line of Shirish Pardeshi from Centrum Broking. Mr. Shirish Pardeshi, your line is unmuted sir, please go ahead and ask your question. We have next question from the line of Saurabh Patwa from HDFC Mutual Funds.

I hope you're able to hear me properly. Congratulations for a decent set of numbers. I just wanted to understand 2 things. First is, if I'm just listening merge 2 calls of today, the results of 1Q and 4Q and the 4Q con call, it appears that the hair oil market, in general, is in -- is facing a lot of volatility and turbulence. But our current quarter result shows a much better picture than what we would have believed so based on what was mentioned in fourth quarter. And also, there's some confusion, which I'm not able to understand. So as you mentioned, offtake has been very weak in rural as well as in urban compared to what we have reported. So is it because of some lack of pent-up -- is it could be because of a pent-up demand and things may actually weaken further in coming quarters as the pent-up demand in the system moves away? And also, what could be the share of sanitizer in the current quarter revenue, if can you just share that number?

Okay. Thank you, Saurabh. So quite a few questions, so I'll try and answer them in some order. So first, I'll answer the first question, which -- the last question, which is what kind of percentage contribution would sanitizer have had. So sanitizers contributed to high single-digit percentage of our total sales for the quarter. So this was obviously because it was launched, so it had some traction in the first quarter as well as the 2 newer scales that we have launched. We'll have to see going forward what kind of traction we get as the consumer offtake. As you are aware, the market is pretty cluttered, and we are also looking at -- seeing how we can make use of that. And maybe -- while the market still remains pretty large and it is not going away in a hurry, the market is cluttered with lots of products, and we'll have to see where we can make our USP and remain. So we still strongly believe that for the medium term, this is a product which will last for us. So we will continue with this product and not really go away when the market stabilizes. So this is as far as the sanitizers is concerned. As far as the hair oil market is concerned, yes, to an extent, what you said is correct. In the month of April -- in the month of March, obviously, the inventories at the distributor level had gone down substantially. So in April, whatever little offtake that happened, our sales was much higher than that. So we had to replenish the stocks this thing at the distributor level. Since then, the distributor stocks have really not gone up. So if you look at the stocks, in March, we were -- we had come down to something like 19 days of stock at the distributor level. Now that has gone up to about -- it went up to 24, 25. 26 is where we are sitting as far as June is concerned. So really speaking, a bit of a 7-day kind of a gap, which has got created, which would have also reflected in our March sales. Going forward, there are 2 ways that you can look at the market situation. One is obviously, the hair oil markets will -- we do not expect an immediate big recovery, but we also don't expect that market to really crash big time. So as far as our ADHO is concerned, we will continue to have our strategy in terms of our -- ad spends will continue to be there. So we have done some -- a little bit change in our GC in the terms of where we are now advertising. We are now a little more focused on the rural channel. So more GC2 rather than GC1 is where we are focusing as far as our advertising strategy is concerned. But we feel that this market is not going to go away in a hurry. It is not going to collapse. I mean, April, May, there might have been a little bit of a down this thing, but that is not something that will remain for a very long time. So offtakes will come back. This is not a product which is -- even though it's not an essential, it will not go away completely. Other factors that our kind of market share, which is just about a single digit to just about 10%, 10.5% kind of a market share, we still think that there is room to -- for us to play across geographies as well as across products. This is something -- at this moment, I don't think we have a complete plan in order so to say, but this is a clear space where we can play. And there's a large part of the market. Even other than coconut, there is enough space for us to play, which is something that we will continue to play.

Okay. Can I just add 1 question related to this, if you may permit. Is -- how would have our -- our working capital would have changed because of this sharp inventory movement as in the inventory fill up at the distributor end?

Yes. So see, the working capital -- see, as far as -- if you were to compare with the March numbers, the inventories have obviously gone down. And that is mainly because your inventory -- it was expected to go down because you have the raw materials, you have the FG and you could not deplete that, right? So that has obviously gone down. So inventories, as of March end, it was about 28 days. Now it has crashed down to about 18 days. Trade debtors more or less remain similar because we do not operate -- as you are aware, that we do not operate with credit at all in the trade -- in our general trade. It's only in CSD and some of the modern trade, we have a bit of credit, which is typically hovers about 13 to 15 days. So we are sitting at 15 days of stock. So this is just about that. Payables more or less remain at a similar level. Again, payables have gone up in March by the same logic, 36 days of payables, which has gone now to 26 days. So more or less, we have a working capital, which still remains pretty comfortable with a negative working capital in the negative trajectory.

We have next question from the line of Amit Doshi from Care PMS.

Sir, you mentioned that even the premium hair oil segment is seeing a bit of a downtrend. And -- so can you say what kind of products that we have in our basket which would cater to non-premium segment? And anything new planned in that segment in the lower value or a non-premium segment?

See, as you see our product basket, obviously, as you are aware, we don't have a very large proliferated product basket, and the few segments that we wish to play in. So for example, at this very onset, let me just say that coconut is not something that we are looking at the very welcome and current moment. So that's a large basket is out. I mean, I'm saying, at this current moment, definitely, that's not where -- I'm not commenting on what might happen or not happen in the future, but currently, we are not into coconuts, right? So that leaves us a few of the options. So Amla is one option, which already we have a product. I mean, we have actually 2 products in the Amla basket, which is, as you might be aware, the Brahmi Amla as well as the normal Amla that we have. Now this is something that can be dialed up. It has been a product which has been going through our rural initiatives that product has already been going into the market in May and June. This is something that we will see in the future how much -- and how much we can dial up and what kind of effort we need to look at. There are already 2 large products in the market, and we need to figure out where we stand as far as this product is concerned. This is, at this movement, more on experimental stage. We are also trying to find our feet and see where this is. So that's 1 product which will definitely be there. Having said that, ADHO will still remain a strong play as far as we feel our concern. I mean, we'll be looking at the different pack sizes and kind of offers that we need to put in this product to see that ADHO remains relevant. And even though the overall -- there's a downtrend that is happening as far as the purchase pattern is concerned, we would like to think that ADHO will still have a large play in the marketplace, and it will not keep crashing the way it has crashed in the first maybe 2 months.

Okay. Okay. While we're in a lockdown and this COVID situation is, of course, unprecedented, but during this period, I think it would have -- on the other hand, it would have given you an opportunity to identify part of the sales or the part of the demand which is inelastic because you mentioned that 3 months we were off-air. So what sales we could conclude without kind of ad spend and those kind of expenditure? So what portion do you believe that is there? And pursuant to which any -- considering that, any change in the ad spend plan that we had because eventually, we used to spend lower -- last year after the new strategy, we decided to spend higher. And probably now, is there any change on that? So that 2 questions are connected.

So the first question is, really speaking, it's very difficult to put a number to the inelasticity of demand. Because as you are aware, I mean, consumer preferences and practices, especially in personal care space becomes a little difficult to change. And especially a category like hair oils, et cetera, people's perception and people practices, et cetera, is far more difficult to change than maybe some of the other practices like, let's say -- other products like maybe shampoos or soaps, et cetera. So we personally think, there is a bit of inelasticity in demand. But exactly putting a number, et cetera, I would not venture that way. So that's a little bit difficult. Sorry, what was the second question, sir?

No. So any plan in the change of the ad expenditure?

So ad spends. See, this was very unprecedented as far as March to June was concerned. This was -- I think in the history of the company for the first time, for 3 months continuously we were off-air. Now that is not something that we would want to see ever in the future or something that -- I mean if conditions were really that bad and we were forced to do so, we will have to do that. But we hope that we don't have to go through that history once more. So at this moment, if you look at, since mid-June, we have been on air, and we have been substantially on air back to our pre-COVID level. And unless there is some unforeseen situation, which you don't know in the situation, we really can't predict, we would like to continue with our ad spend strategy. We would want to fully back ADHO, so that the salience of ADHO across the consumer mind remains strong.

Okay. Okay. And -- so what is one reason that you can attribute to increase in market share? So our in market share has just improved by a few basis points, 10.1% to 10.2%. But any reason that you would like to attribute to increase in the market share?

Frankly, if you ask me in this kind of a very, very uncertain situation, market share is also need to be read a little more in fine print because -- rather not read in fine print is what I would say. Because month-to-month, variations will keep happening. At this moment, as you saw, the company took a rural drive, so that rural reach expanded. So we were going into a far more number of retail stores in the rural market that we were not. So that would have obviously given us some head start, et cetera. Now whether that continues or not, whether that can be sustained by the organization is something that we need to see. And if that happens, then you are making some structural movement in the marketplace. So that I think we should wait and see whether that happens or not.

Okay. Okay. Okay. And last one, just on the March month or whatever because of the 10, 15 days lockdown, what sales lost could have -- would have been kind of a carryforward in the June quarter? Any rough idea is also fine, abroad?

If you look at our absolute number how much we lost, it was about INR 63 crores of business that we lost, if you were to look at equal to equal between March 2019 and March 2020. Now how much of it has come back, et cetera, is a little difficult to predict. But as I said, our inventories at the distributor level had gone down to 19 days, which is now back up to 26 days. So that 7-day recovery of stocks, you can just add on that. That is something that has come back to the company.

We have next question from the line of Abneesh Roy from Edelweiss.

Sir, congrats, good recovery in May, June. My question is on the consumer behavior. So what we are picking up is in bigger cities because of work from home, especially the male consumers, they have cut down on the hair oil consumption in general. And on the other hand, in the industry clusters, so some of your states have got big industry clusters because of the migrant chaos, migrant travel to their home states, et cetera, plus a lot of things, obviously, they would have cut down. Hair oil would not be anywhere in terms of priority for them. So in these micro pockets, could you comment how the consumer behavior has been because you can easily get that data?

Yes. Actually, if you look at, some of it has actually played into our hands, if you were to look at it that way. So a large part -- the COVID actually happened through the harsh summer. And as you are aware, that is when the cooling oil is used by the exact TG that you are mentioning, right, the male -- rural male population. So the cooling oil has clearly suffered. I mean, we had some plans. And now that is all history to look at how we could play in that cooling oil space. Obviously, we had to shelve our plans as we saw the business -- as we saw that market playing out. So clearly, there has been loss of sale in the cooling oil segment and the players who are strong in that would have had -- would have faced the brunt of its impact. We did not really get back into the cooling oil. While we have launched our product 2 years back, we really wanted to get into do something on that. We really did not enter it back this year, at least. So we did not face too much of brunt of it. Now if you were to look at the TG that we have for our ADHO and what we claim and the end customer that we are trying to address, that was not really the segment that we are talking about. So obviously, there has been an impact. I cannot deny that there has been an impact on that. But fortunately, we are a little shielded off from the exact TG that you are mentioning, and hence, possibly, we are not that badly affected as maybe some of the other segments were -- sectors were, yes.

But work from home, is that impacting you in the big city?

In terms of sales or...

Yes. The consumer will not use the hair oil because he's staying at home. Because see, lot of Indians also use this when they're going out so that the hair is in place as a styling gel alternative. So are you seeing in the big cities, for example, Mumbai, Pune, wherein you are anyway strong? Are you seeing that kind of impact in the residential?

See, I don't think, based on consumer behavior, we see too much of a change. I don't think there is enough study that is available to us, which will tell us whether this is the reason why urban sales are down. I mean, our understanding is that we are not able to distribute or we are not able to reach our this thing. So I don't think we will see too much of -- I don't think -- rather I would not suggest that consumer sales is -- consumer practice of using hair oils is going down because in the urban markets, they are sitting at home. I mean, it is similar to this thing in terms of shampoos, for example. I mean that had gone down, but by May, et cetera, we see that has already recovered. But yes, distribution is clearly a concern as far as the urban markets are concerned. We are not able to reach the retail market. Modern trade stores are closed. So that clearly -- ability to reach to the urban customer is clearly a concern.

Yes. My second question is more at the strategy level. Now you have spent 7 months in the company, 6 months as CEO and 1 month as MD. So you clearly come from a much larger, much more systematic company, Asian Paints. So in terms of, say, strategy or, say, monitoring or the sales force automation, in terms of the advertising or the route to market, what are the issues in Bajaj Consumer? It's a small company. Last few years has been extremely tough for the company. So in that context, which are the ones you have identified? I'm not asking which you have done. In corona, obviously, a lot of things will not be a priority necessarily. But what are the issues you have identified in these segments?

So Abneesh, just to answer that question, I think, as you rightly said, I mean, Bajaj is obviously a smaller company from where I come from. But if you look at the basic practices in the organization, they have been pretty strong historically. It's not something that it has really suffered in terms of practices, et cetera. But some improvement areas possibly will be obviously focused on in terms of process systems control, governance, et cetera. I mean that is something, obviously, we would like to dial up going forward. I think that is a continuous journey for any organization. Cannot be talked about Bajaj Consumer as such. But that is something definitely we will focus on and continue to work on. So as you saw, SAP HANA or even the automation of our sales force automation, which is through that AI tool, Selena. These were done much before I came. It was not something that I have started. But -- so that is my job. I mean, I have to continue the journey. It's a continuum. And I would like to dial up this process system, so that as far as controls, et cetera is concerned, all these governance, et cetera, all this entire area, entire set we dial up for the next 5 to 6 months. Now as far as the strategic directions are concerned, I would think, as I was -- as I made a statement in the opening statement, obviously, we have some thoughts at the beginning of the year as to what we might want to address, et cetera. But given the volatility that we see in the marketplace, this is something that we stick keeping a close eye on. We are also working in parallelly as to what we want to do in the future, et cetera. But at this moment, we don't want to activate most of it. Most of the activation we see, well, at this moment, will be focused on operational excellence. There's a large part -- large piece that Bain has already worked for us in terms of partitioning the markets, what are the various gaps that you have identified in the markets that we play in, which is basically the Hindi-speaking markets and where Bajaj can have a meaningful role to play. This already, we are activating some of it, again, contextually because you can't implement really in 360, whatever is being suggested. And that is something that we will continue to do, while we also look beyond what else can be possible. But that is -- you'll have to wait for a few quarters before we really get into some strategic direction.

And sir, last follow-up related to this question only. If you see, Asian Paints has done multiple forays into adjacencies in the paint and have done reasonably well. But if you see Bajaj Consumer, on the other hand, almost all its adjacencies have failed, say, in cooling hair oil or any other hair oil. Similarly, the acquisition also completely failed. So being a single category, that's a big risk. So once the normalization comes after the COVID, will that be 1 of your top 3 focus areas that diversification has to be there? Or you will focus more on the low-hanging fruits because in hair oil, I understand, a lot of low-hanging fruits are there based on what Bain has also given in terms of recommendation. What will be the bigger priority? It can't be both, I think.

See, first and foremost, I would not like to compare one company with another because all the market conditions are different. Markets are completely different. Segments are completely different. So really speaking, what works for one company will not work for another company. Having said that, at Bajaj Consumer, I mean, we are completely aware of the fact. I think I would think that internally, people are more aware than as in the external world, what has happened in the last 5 years, what we have succeeded, what we have not. And I think when we put all this in the potboiler and plan our strategic directions, we would keep all these points in mind while we go forward. We know where we have succeeded, where we have failed, and we would like to take these learning lessons. Now whether we would really go outside hair oils, what are the spaces, et cetera, I think we'll wait and -- wait for that to come out, which should be through by another 2, 3 quarters. I mean, we should be able to come back. At this moment, we really don't want to speculate. Obviously, all of these points are on the table. We would like to see where our strengths lie. What are the things that you can chew, and which are the ones we can back for some reasonable long term, at least, mid to long term. One thing that we have learned out of this exercise is possibly that if we take up a project, we should not take up too much on our plate. And what we take up, we should be able to see through consistently. That is something that we would want to take up in the future. So what, et cetera? Maybe you'll have to give us 1 or 2 quarters before we come out with what exactly we would want to address.

We have next question from the line of Tejash Shah from Spark Capital.

Sir, when we spoke last on the quarterly call on 19th June, we were actually -- we called out challenges in market condition. Even CSD was under pressure. Exports also, we called on, there were under pressure. And then we report sequential recovery. So as we speak today, would you say that demand environment has improved significantly on month-on-month or quarter-on-quarter basis? Or is it looking at COVID data again coming back in many cities, you believe it is -- there is no structural trend to read react?

Okay. Good question, Tejash. In fact, frankly, if you ask me, I don't have an answer to that. Because as I said, as we speak of July, last 5 days, things have completely changed. We had a thought process having seen how May worked, having seen how June worked which was better than May, we had certain plans in July and we are going strong with that. And suddenly, in the last 7 days with the kind of lockdowns we are seeing in Bihar, and in Guwahati, and in Jharkhand, and in Bangalore and Chennai, which possibly doesn't affect us and a whole lot of other cities, we really do not know where this is. So that's why I said, being a little fleet-footed -- I think being a smaller company here helps because being smaller, you are a little nimble-footed, you can really react without much impact on your overall numbers. So that is something that we'll keep a watch on and be, I think, aware of that continuously we need to keep reinventing ourselves just to make what is contextually relevant for the next 3, 4 months. While we work on what we want to do in the strategic directions, et cetera, which is more of a little longer term, what are the strengths we need to build up, et cetera, this is something that we will keep a close watch on. As I said, July itself looks pretty difficult. I mean, in the last 3, 4 days or last maybe 5, 6 days has been pretty scary. So we don't know how it ends. If you were to ask me today, how will July end, I have no idea how it will end. So this is something that we will have to be careful of. And as we strategize and calibrate, we need to keep this in cognizance going forward.

Fair enough, sir. Sir, second, just extending question from Abneesh that whether work from home is impacting urban consumer on hair oil category. So you said it seems largely that it's a distribution challenge rather than consumer challenge. So would it be the case that our channel inventory will be lesser than optimum at this stage in urban markets?

I think we would like to think so. I think because what is also happening is you'll see the customers are also visiting the shops much lesser. So that's why you see the higher purchase of the bulk packs. And in fact, the larger packs are selling much more than the smaller packs because the frequency of visits to the shops have also gone down. So yes, we think inventories would have gone down mainly because we have not been able to reach, we or many other companies who have not been able to reach to many of the shops, and many of them are not open on a regular basis. So we think that inventories would have gone down. But when and how it will recover, et cetera, it is more in the space of speculation rather than actual, any understanding.

Sure. And sir, sanitizer contribution high single digit, it is quite commendable. In fact, some of our other initiatives in the past would have taken much longer to reach that number. Now this could be a surge in demand because of the obvious scenario also. So is the commitment from our side to the category of fleeting ones or we are not very sure how it pans out? Or you see an opportunity of structural engagement here also?

See, as you rightly said, I mean, this was a tactical opportunity. By any stretch of imagination, if you were to say that we were really planning to get into this health and hygiene space, which is how I would like to classified rather than just call it a hand sanitizer. So this is a space we were obviously not even dreaming off when sitting in the month of February. But come March and come April, we saw a tactical opportunity. As you would be aware, we have converted one of our factories partly into manufacturing of hand sanitizers. So that shows some commitment from our side. While we understand this is a market which is very, very clutter today. There's a lot of -- it is actually to the extent of being commoditized. Our understanding is if we were to hold on to this for the time being, quite a few of these players will fall by the wayside for 2 reasons. One is the larger players where the stakes are much higher with the gross margins and their regular category products are much higher. They will not want to continue. And some of the smaller players where maybe issues with alcohol availability might come in when actually the petroleum companies will open up and ethanol demands go up, et cetera. So we really don't know how the demand/supply equation will play in alcohol. That is the time it will be for us to decide and figure out whether we'll be able to play long term or not. At this stage, we want to hang on to this. We see there is a potential in the future, but we really don't know whether we can play a long term. Now if this is a potential we see, we want to exploit. There are other products also in the range we might want to explore in the entire hand -- I mean, health and hygiene space. So this is something that I think we'll wait and watch rather than comment upfront and go haywire on that.

But sir, the margin conundrum that you spoke about stands for us as well, like if I do rough math then the realization per ml will be 10% of our hair oil realization ADHO. So broadly that conundrum will stay with us as well. Is that correct understanding?

No. Sorry, I mean, how did you get the number of 10% on this thing?

So government has stipulated price of sanitizer per ml and versus our realization of INR 60 per 100 ml. Just doing a rough math that our realization in sanitizer has to be much lower than our existing product line.

Yes, it is much lower than the product line and maybe in the initial stages, as I said, I mean it's a cluttered market, and we also wanted to be relevant both in the -- so we were -- had a decent primary followed by a good secondary. So obviously, it was a little push-based. I mean in no stretch of imagination, can you expect the consumer to look for Bajaj hand sanitizers or Bajaj multiple sanitizers -- multipurpose sanitizer, right? So obviously, it has been a push-led strategy, et cetera. And that is what I'm saying, we'll have to -- we'll just weather the tied for some time. It's not something that we'll aggressively push, but we'll remain relevant in this market. And when the situation normalizes, we'll just assess as to whether there is enough play in this market for us to play or not. We don't have a large appetite. It's not -- it does not seem to be a large, significant part of our portfolio. But if it adds into our portfolio and there may be some more adjacent products we want to add so that the entire product -- because one big advantage we have is the distribution channel is already there with us. Some of the other areas where maybe the pharma channel or maybe institutional sales is something that we are also looking into our own the same thing, whether we can dial it up, whether we have a play there or not. If that we are able to figure out and that we are also looking at whether we want to be in there or not, if that is something that is there, this is something that we might want to stay there. But at this moment, I would not want to commit 100% that yes we will stay. This is something that we will keep a wait-and-watch policy.

Yes. And sir, lastly, if I may, last question. So we are hearing you for second time, and you specifically said that this is not the time to embark upon 3- or 5-year plans. And then today, also, you mentioned twice that this is a time to actually look for contextual solution to the problems. Now if you have to prioritize the problem, your focus will be to solve revenue growth in this environment or to actually streamline cost structure and be focus on cash conservation and cost growth. So what would be the gold seek of this contextual solution for this year, 2020?

Tejash, just a small correction to the narrative itself. I said that I would not like to articulate the strategic vision because it's not that we will not be thinking of the strategic vision. That's a little bit of a semantics, if you can push it. I mean, this is something that, obviously -- see, you cannot operate with a -- without a goal in mind, right? I mean, you cannot just operate in absolute platform and just say live by the day. So obviously, there's some work going on at the back end, where -- what we want to do at, et cetera, et cetera. But at this stage, I don't think it is -- there the -- the recipe is only there. There is no finished product. So we don't want to come out in the open or discuss. It's very, very in the conceptual stage. So it's not that there's no focus or there's no mind to look at that. Having said that, yes, contextually, we need to keep finding solutions because operational excellence is something that we need to keep driving. I don't think there is any option for any company in these conditions to drive operational excellence and look at growth. So if you have to look at the priorities, yes, clearly, for this company, which has had issues with the top line growth. I mean, it has always had a fantastic EBITDA and even better PAT at times, yes, or about to be same if you don't look at the treasury numbers. So looking at cost structures, really speaking, is not that much of a concern. You look at employee cost, last year, it was restructured quite well. And I don't think this is an area which you can keep driving beyond a certain point. There will be some structural changes made to the organization as well for making future-ready in terms of strategic members coming into the team, but that is something that we will wait and watch to see what happens in that space. Not too much of cost changes will happen, but some buildup will happen in that area. But I think the more focus at this moment is looking at how do we drive top line. And even if that means a little bit of a change in the EBITDA percentages here and then, we would look at absolute EBITDA and absolute top line numbers. These are the 2 numbers we'll drive. Obviously, we will not get to -- anyway we can't get over-leveraged as a company with a negative working capital and really speaking, no CapEx. Yes, there is always option of the M&A, which we will keep exploring. And even now in these conditions, we are exploring because we feel that in this kind of valuation that companies are getting, I mean, there might be opportunities and there might be gems which are there. So this is not something that we are actively pursuing. I cannot tell you that there are some targets, so that would be not a truth. But yes, this is something that on a corner of our eyes, we are keeping track of. But internally, if you ask me, operational excellence, setting up our process systems and ensuring top line and EBITDA growth, EBITDA growth as absolute numbers. If that means a few basis points plus/minus here, it won't go plus, it can only go minus, I mean, we should be able to take that.

We have next question from the line of Percy Panthaki from IIFL.

Sir, could you give us some flavor on the secondary sales growth, how it has trended during the quarter, April, May, June? Is there an increasing trend, decreasing trend? Is it more or less sort of similar across 3 months? Any kind of flavor that you can give will be helpful on secondary sales?

So I think you saw the month of April, even though we had -- our sales had crashed, our primary sale was ahead of secondary because of the sheer lockdown that happened in March and actually the stocking went down. So primary was clearly ahead of secondary in month of April, right, even though with lesser sales. So we had far lesser sales, but whatever little sales we had, it went down. But in the months of May and June, if you look at, I think May and June both, and that is a very encouraging sign for us. While May and June were both good months, we saw that secondary actually keep up with primary. And that is also backed up with the data that you saw -- data that I told you -- that from March where we had 19 days of stock which went up to about 24 days -- March, which went up to 24 days in April, the distributor stocks have remained at 25, 26, that's it. It has not really gone up substantially. So secondary is actually following that. As far as offtake is concerned, obviously, you will see the June numbers coming off sometime in about 21st of July or something, maybe another 5, 6 days. We'll get a sense of what kind of offtakes has happened across the country. But we get a good sense that secondary is keeping up with primary this thing. And the numbers are now at the similar levels as that was there in pre-COVID.

Right. And between May and June, the secondary sales is more or less the same amount of decline? Or is there a material difference?

Actually, in June, the secondary sales has gone up substantially over May, which was itself pretty high. So in May, for example, we were clocking in about just a little below the COVID levels. In June, the secondary sales have been higher than the COVID levels. In the last -- let's say, in the last 6 months, June has been a little higher.

Okay. Sir, just 1 small calculation I made, which I want to run by you, whether it's correct or not. So basically, your sales decline is about some 18%, 19%. If I remove the hand sanitizer part and look at only hair oils, the decline will be somewhere around 25%. And if I add back that 7 days of sort of pipeline fill in, which has happened, at the secondary level, the hair oil sales decline is somewhere in the region of 30%. So is this calculation roughly correct?

That calculation would not be correct because you are assuming that the hand sanitizer sales primary has matched secondary. So that would also not have happened, right? So you will have to discount the secondary in the primary sale that has increased for hand sanitizer you have to receive for secondary. So if you look at overall, your math is correct. If you look at the minus 25% that you talked about in terms of primary, that's absolutely correct. And that is what would have happened. I mean ADHO itself would have been a little less than that, other products, which are the marginal products that we have, have actually gone down a bit. So I mean, ADHO is roughly similar to the overall hair oil decline that we have, really not too much because we had a little bit of growth in Amla, as well. Now these are very, very small products. Our company obviously doesn't [ look at ] too much other than ADHO. So minus 25% is correct. So my point is that secondary in -- as far as sales is concerned, hair oils, we would have also clocked in very similar numbers as far as hair oils are concerned because hand sanitizer, the gap that you are talking about is more going on to fill up the hand sanitizer this thing. At this moment -- so just to paraphrase, at this moment if we look at, I am a little concerned with the 26 days of stock as far as distributors are concerned. I am a little concerned that ADHO itself, the stocking would be low at this stage. So that is something that we would want to ramp...

Understood. Understood. And last question from my side, see, Bajaj Almond has been positioned in a dual way. There is a styling benefit and there is a nutrition benefit from Vitamin E that you advertise. But of course, in consumers' minds, my guess is that the styling benefit is slightly higher than the nourishment benefit. So in this kind of an environment where styling is not that big a need because people are not stepping out that much, et cetera, would you want to change your advertising strategy in order to emphasize the nourishment benefits of the product more?

It's an extremely interesting question, and this is something that we have been discussing in the last 2, 3 months intensively with our ad agency, et cetera. Is it styling that we want to drive? Or is it nourishment and hair loss that we want to drive? Now interestingly, if you notice our ad pattern, in the last time, for the first time, I think, in the history of the company, last year -- I mean, our year back ad, if you look at, that is where we were driving nourishment and hair fall. And we -- if you look at -- so that's about now 1.5 -- 1 year -- a little less than 1 year, where we drove that nourishment and hair loss this thing. And when we do the -- just stick with the consumer, we realized that, that is giving far better traction amongst consumers saying that, yes, clearly, nourishment and hair loss they could relate to. Styling is nice. I mean, obviously, it's a good feel. But moment it is hair oil, the moment, it is something that -- I mean, our value benefit is -- attribute is very, very clear. I think the saliency of the product itself went up. So that is something that we would want to stick to. So if you look at -- again, if you were to go back and look at our 2 ads, we have slightly moved from the styling. We are not going away from styling and being a head product. I mean that is not something that we want to go away with -- go away from. But clearly, nourishment and hair loss is something, that's pure attributes. It's something that we have already dialed up, and that is something that we would want to continue with. So that's where we are at ADHO at this stage.

We have next question from the line of Shalini Gupta from Quantum Securities.

Yes. Sir, I just wanted to -- wanted a clarification. Sir, our ad expenses to sales have been 14%, 15%, 16%. But then about 2, 3 quarters back, the management guided that it will go up to 24%, 25% to support your -- getting into new markets and stuff like that. So now what is -- what kind of ad expenses should we expect?

See, if you look at quarter 4, that was an aberration because of 2 reasons. I mean, if you were to look at quarter 4 -- so let me start with quarter 4 because that evoked a lot of questions in the last investor call, right? So that was very clearly -- we had invested quite heavily. There was full action that was happening as far as the strategic intervention was concerned. We have taken up multiple stakes, and we are already spending the money going forward in many ways than just ad spend. And obviously, the revenues did not back it up, right? So what we are clearly saying at this stage is, we would obviously want to continue at similar levels that we saw before COVID. That is not something that we would want to go back. The first 2 months, April and May, clearly, we had no clue of where it's going. We are also monitoring how others are in this space, who is going back in at. And only one of our competitor really was back in -- back on TV in a big way. So we are also monitoring that, and we decided that by 15th June we would also be back. And at this moment also, we are taking it quarter by -- fortnight by fortnight. We want to remain completely there as we were in pre-COVID. And as we go into more market-specific actions, et cetera, maybe we will dial it up. But dialing down will only happen if there is like, for example, closure of markets, if markets were to close, if we go back to, let's say, end March, beginning April kind of a scenario. If that were to repeat, then maybe we will relook into it because the spending money without getting any effective return, et cetera, would not make sense. But if we see markets remaining open and we are able to go into the market and service our customers, this ad spends and -- the pre-COVID levels of ad spends, you can take as something that we will continue with. Maybe if you want to dial up, maybe dial up. Dial down unlikely.

So when you say pre-COVID, basically you're saying ad expenses will be 14%, 15%, 16% of sales. Is that correct?

So if you look at that entire A&SP spends, I would think it's about -- something about 17%, 18% is what we have been averaging. So that is something that -- I mean, Q1 was about 16.8%. Q2 was 17%. So that is 17%, 18% kind of number is something that you would wanted.

Okay. And sir, next question is, see, we have rural growing much faster than urban in this quarter. So I'm just asking you, does this have any EBITDA implications for you? I mean -- yes.

See, the way rural -- basically is the distribution cost. I'm assuming you are asking for the distribution cost because that's the only cost that gets added on to this thing because you are reaching out directly through your own intervention, through brand sales, et cetera. So there -- yes, it does have a bit of an impact. But really speaking, in terms of material impact, et cetera, it does not...

Okay. And sir, now we've seen in the hair oil market, that basically the lower-priced oils like Amla are doing well and the slightly premium oils are not doing well. So I mean -- so -- and this was a situation even before COVID. So sir, I mean, till when do you expect this to continue because ADHO is -- your Almond Drops is a very significant part of our portfolio, and Amla is a very insignificant part of the portfolio. So by when do you expect -- broadly speaking, when do you expect Almond Drops to really come back into positive territory? And what will be the drivers for that?

See, as you rightly said, I mean, clearly, the economy hair oils are doing better. So we are also keeping a watch on it. And I just said that we have already started trying to see how we can make some more meaningful play in that segment. I mean that seems to be the other option that we have for us. Having said that, ADHO will continue to remain our [Foreign Language] absolute focus area. I don't think at any point of time, the -- that will go off from our radar in any manner whatsoever. I mean, not only going out from radar, even a little bit of attention going out from the radar will not happen. That is something that we'll continue to focus on. And if you look at the premium oils, the impact on the premium oils, the really, really premium oils, which is a level beyond ADHO, I think the severe impact has been more on that category. ADHO, I think the user base is also a little loyal. And whatever little loss has happened is more keeping in the market growth rate. So really speaking, not huge losses has happened in this category. So we would like to monitor that, and we think that as market stabilizes, that will also keep coming back. Really, if you are looking at buying share from others through ADHO at this stage, that is not something that we are looking at in a big way. I don't think that will happen. We will ensure our distribution reach of ADHO, et cetera, is maximized, so that customers where it needs to reach is reached. So that person who's looking for ADHO doesn't get ADHO, we would like to minimize as much as possible. I think that would be the approach that we would take at this stage.

Okay. And sir, my last question, I was speaking to someone who really does a lot of distribution for the FMCG sector. And he says that the bigger problem is that there isn't enough manpower with the distributors. So companies are not really even now able to reach their product to the end consumer as much as they would like to. So would that be your experience also?

Sorry, can you come again? I just missed the first one.

Yes, sir. So basically, someone who -- I had a call with the person who handles distribution for the FMCG sector. So he was saying that the bigger problem now is that even now there isn't enough manpower available with the distributors. As a result, a lot of companies are not really able to reach their product to the consumer as much as they would like to. So would that be your experience also?

Yes, absolutely. I mean, I think -- I don't think we are operating in isolation. So that is absolutely a correct fact in many markets, not only from distributors, even from our deposits, et cetera, logistics is clearly an issue, ability to reach our end customer, last mile is obviously something that we are struggling with. And hence, we are looking at various means and methods how we can reach our customers. So this is something that will keep happening. So use of delivery boys, et cetera, et cetera. We are also trying to innovate as some of the other companies are.

We have next question from the line of V.P. Rajesh from Banyan Capital.

Yes. Just 1 question. So when you say you had stopped TV for the last 3 months that is the differential between, let's say, 13% ASP that you reported versus a 17%, 18% that you were talking about? Or there were something more that has also been taken out of circulation?

Yes, that is basically the main thing that is -- that was there. I mean, there were other bit of consultant cost, which was there, which you can understand last year. So that is going out. Beyond that it's negligence.

Okay. And then the second question, you said in the last 4, 5 days or maybe longer, there have been localized lockdowns. So can you just give a little bit more color on that as to -- is it starting to impact the rural markets? Or is it just there are more disruptions on the supply chain? Just more color on that would be helpful.

That's actually a very good question. As we look at this -- while our entire narrative of the first quarter has been on rural markets going gaga and we have been very excited about the rural market. For the first time in July, we are seeing that since -- in the rural markets itself. If you ask me, frankly, rural markets might be a little more impacted than by the end of July. This is, again, crystal gazing, but rural markets actually may get impacted because we are seeing all these Bihars and all of those Jharkhands and Guwahatis of the world really getting impacted. And those are our markets of interest. As of now, fortunately, UP remains still relatively isolated in terms of not having these lockdowns, but we really never know because it's a kind of migrant workers who have gone back and these are things that are now coming out in the open, and we are getting to a feel because as it has proliferated the COVID, we are really getting a sense of what has happened. So this is something that is clearly worry rural markets are -- have been affected in the last few days, and we don't think it is going to go away in a hurry in the next maybe 2 weeks, 3 weeks, et cetera. So we'll have to keep a wait and watch on that.

We have next question from the line of Prakash Kapadia from Anived Portfolio Managers.

I have 2 questions. One is what is the contribution of sachets currently? And we had launched the INR 10 bottle. So if you could give some color on that? And going forward, we see increased contribution from sachet and the low LUPs to our ADHO sale?

See, at this moment, it is about 14%, and we have seen a steady decline of the sachet over time. So really speaking, sachets have not been doing well for quite some time. Quite a few quarters, not only this particular quarter. And as I said, I mean, it's a little difficult to just gauge as to what might be happening there. But clearly, we see in the urban markets very clearly move towards the larger pack because people are making lesser visits to the marketplace, et cetera. And in the rural market, the move is more towards the cheaper products, which you are getting a higher value for money rather than look at higher-end products which are smaller package, et cetera. So this is something we are keeping a watch on. And I don't think INR 10 has really taken a -- the thing from the INR 1 sachet. So we have also actually launched our INR 1 Amla sachet, which has just gone to the market, just hitting the markets now. So we would also like to see how the 2 play out. I mean, that's a 3 ml, 3.5 taken out, 3 ml sachet, which is hitting the market in terms of Amla. So we'd also like to see how those 2 play out. And maybe another 2, 3 months, we would be able to get a better sense of what is happening in the market. Is it because of the price of the per ml product that is coming out? Is it the overall price of the entire package itself? So we'll have to see that.

And this sachet at one point of time was around 25%, right, if I remember correctly, over a period of time that has declined from around 27%?

I don't think it was -- 17%. So it was about 17%, 18%. 17%, 18%. So now that has down to that. So there has been not a sharp decline that we have seen in sachets. But yes, clearly, the trend is visible. Sachets are not something that is like exploding or even in this market condition, where you are seeing people are down-trading, so you would expect that they will go and buy those INR 1 thing. That is not something that has been going up too much. It is more that you are seeing a little larger pack sizes, which are now -- a little larger price points, which are doing well, which is if you look at rural, the INR 5, INR 10 and the INR 20 packs are pretty -- doing pretty well.

And secondly, on our dividend distribution or our payout ratio earlier, I think we had a policy of distributing large part of our profits. I think average payout has been around 80%, 85%. So now I think last financial year, there was a cut in the dividend payout. So what's the stated capital allocation or a dividend payout policy? Because businesses like us don't require too much of cash. So what's the stated objective now on...

See, as we discussed -- I mean, as we discussed during our June call, so I think at that point of time, the more understanding at the Board level was that at this moment, cash rather we conserve because we still don't know how it is going to end. Even today, as we look at, I mean, we are still expecting that come September when actually there was moratorium on all these EMIs, et cetera, stop. I mean, we want to see how consumer behavior actually operates in the disposable incomes will sharply fall. So if you were to look at the kind of cash reserves that we are sitting at INR 500-odd crores that we are sitting at, really speaking, it's not a very large amount. And clearly, I don't think the dividend distribution policy, et cetera, will go through substantial changes. Maybe this year, we wanted to conserve cash. Maybe we played a little conservative. And I know how the -- how all of you reacted and how all of you feel about it. But I would think that going forward, not too much of changes in our way of thinking, et cetera, will happen. At this moment, it's a very extraordinary year. We wanted to conserve cash, and that's how we have kept it.

But there is no change in the policy, you are saying, like...

I don't think there was any policy stated as such. And I don't think there will be any thought process change as far as this thing is concerned. So the conservation of cash, see, we don't -- as you rightly said, we don't require cash for working capital, even if we were to go -- even if -- suppose business were to go up, working capital requirement seems very unlikely, right? So then it comes to CapEx. Now CapEx, obviously, there might be a bit here and there, so not really large CapEx. But yes, there are obviously something that we might want to work on. M&A is clearly something that we'll keep a watch on. Now whether -- how much cash will require, not require, whether we'll go into it, et cetera, having had a Nomarks experience, we really don't know. But that is not something that we will want to rule out in a hurry. If that were to be there, the balance is anywhere there in the company for us to look at how we want to do that. So this is something that we would want to keep going forward.

What are the yields? Currently, we are witnessing after the fall-in interest rate on this supply?

So pardon me, can you repeat the question, please?

What are the current yields after the recent fall in interest rate?

See, it's in the range -- as you all know that we have a very conservative investment policy by the Board in which we invest only in AAA PSU ones or in liquid mutual funds. So on an average, we -- on a yield of around 5% to 6%.

Between 5%?

Yes.

And lastly, any update on the moving to the corporate office at Worli? Is it done, not done? It has been pending since quite a few years?

Worli office.

Yes. So see, the Worli office as far as we are concerned, we have just applied for the approvals. I think the approvals -- some of the basic approvals have just come in place. And I think in the next 2, 3 years, et cetera, you would see some movement that is happening in terms of the thing. So approvals -- most of the approvals are now in place, even as we speak just about 2, 3 days back some more approvals are in place. And this is something that we'll keep looking at. And...

You say it will take another 2 to 3 years to...

That is a building to come out, definitely. Maybe we'll look at. If everything goes right, maybe we'll be looking at construction within the next 1 year or so.

We have next question from the line of Nisarg Vakharia from Lucky Investment Managers.

Jaideep, my question is likely of a broader nature. I'm saying that COVID is something that nobody anticipated. So let's forget about that. So before you made a decision to join Bajaj Consumer from one of the most prestigious consumer institutions in India today, you must have looked at their business very, very closely. Now the consensus in the market has been that Bajaj Consumer is in a category which is almond hair oil, which is dead and which is not going to grow and which is never going to grow. We have seen this happening in various consumer companies across cycles for 3 years and then really their mojo brand because they get some strategy change and they rename the brand. I want to ask you what is your inherent belief without guidance on what will happen next quarter or quarters or 2 quarter, forget about that. I'm saying what is inherent belief on what can be the organic growth rate in the Bajaj Almond hair oil category, if you get your strategy right, what is the potential?

See. First of all, that's a very -- how do I put it, it's a very specific question as to how I see Bajaj Almond hair drops growing itself because that's really not -- cannot be the only part of the strategy. I would rather want to take up a part of the question that you asked, which you did not ask me finally, but at least you started with that, which is basically how did I join this company. So if I were to just give you a background as to what I see as the strength of this company. So I see 2, 3 things as clear strength of the company. One is that they have created a rock star brand, right? I mean, I don't think anybody can deny that this was one of the best brands that has been created in this FMCG space. I mean, clearly, no questions on that. Two is the household name of Bajaj itself. I think it's so strong. I mean that inherently brings in trust. I mean, like it or not, that clearly is something that is true. And the third thing, and which is more of my one-to-one introduction with the promoter. I got a sense that there is a person who is extremely passionate about our business, wants to grow, and there is a desperate desire to grow. That to me, give me enough view saying that for the next few years, if I were to look at this business and maybe try and do something with it, there is a possibility. Because if you look at the first 10 years or 15 years since the IPO, I mean the company had done fantastically or rather -- even before the IPO rather. So after that, the last 5 years has been growth has been muted, et cetera. So there is a lot of potential that exists in the company. Possibly, it needs to be harnessed. Whether it can be harnessed or not, as you rightly said, I don't know. I have no clue. But there is clear upside that is possible. Now whether it is through ADHO, beyond ADHO, I would rather think that there has to be a mix of both. The answer cannot be only through ADHO. ADHO clearly needs to play a pivotal role in this. And there is some growth upside that is possible. You -- when you have a market share of 10%, and you don't classify the market as just light hair oil and classify it as a hair oil, that itself gives you the balance 90% to play with. Now how much of it can we play in, much of it is Utopian, much of it might staying naive. My understanding in 30 years of my career is that it's not really anything -- nothing is naive. I mean if you want to do something, possibility is there, right? You might feel you might succeed, but there is -- if you have some method in that madness, there is a possibility that you can do something. So this itself remains. As well as, as I said, the inherent strengths of the Bajaj name being there, the kind of financial prudence that the company has laid out and the way they have structured themselves. And a promoter who has a very clear thought as to and that passion that has everything. I think there is some place that is there for the company going forward.

That's very helpful, Jaideep, in answering that question. I just had one more question on the same lines. A lot of the consumer turnaround stories that we've seen, whether it's a Britannia or a Jubilant Food were companies that were struggling at margins and never top line growth. So they all had depressed margins. Jubilant Food, maybe, for some extent, was struggling with top line growth also. Here is a unique case where the margins are never a problem, but the top line growth is a problem. Can you enlighten us a little bit on what can be the low-hanging fruit, like, example, in Britannia, they immediately came and reduced the A&P spend and got margins and noncore growth also. In our case, what is that low-hanging fruit, which will drive? Because it's all about momentum, right? Your largest -- the reason why I say Bajaj Almond hair oil again and again because your coke can grow only when coke grows a diet coke cannot drive coke's growth. So in your case, what is that one low-hanging fruit if you can share with us, which can drive the growth as a category and then push your company into momentum to grow all other products?

I mean, I think your answer lies is in your question itself. I mean, if you look at -- I mean, there are only 2 things that can happen to our company. I mean the top line crashes and bottom line -- I mean, obviously, I mean, good companies. I mean, a decent company, let's say. Our top line crashes good PAT, good EBITDA PAT, whatever. Or the other way around where top line is growing well, you don't have control. I mean, if you have lost control on PAT, et cetera, that's a completely different story. And that's a over leverage loss control here just to -- mind justly going up sales. I mean, that is -- can be a strategy, but not something that we will follow. So between the 2, obviously, we are talking the first one where we really not been able to break the barrier in terms of top line numbers, right? So now moment you look at it, as I said, there are these 2 things that you would look at. I mean how much play that ADHO has left, which you would like to exploit? And as we did the strategy work with Bain, clearly, told us, there are still many places, even though we have a good market share, et cetera, et cetera, still many places where structurally you can play -- both structurally as well as tactically, you can play in these markets, right? So that is something that anyway, we'll keep in focus, anyway something that we would have, let's say, gone into a whole hub manner if this COVID had not happened, but something that we may anyway continue because this is something already can bear with us. It's just as and when we exercise. We are already exercising in parts of it. The other side is what else can we do to drive growth? Now that is a little more challenging question because of also the history that we have had. I mean, I think one of the first questions that we'll have to address as a group is, why is something -- what are the things that we did in the last 5 years or a little more than that? And why did they not succeed? What are the things that caused failure? And what are the things that we will do in the future and what are the guarantee that they will not fail? I mean most of the new things people do, there is a large percentage of failure that happens but within that also, there are some success stories there. So we'll have to figure out what are our strengths of the organization. What is that we can take it on our plate and chew and look at achieving those to see whether we can drive the top line. So top line growth would obviously be a priority. I don't think there are many other choices that this organization has. And we'll have to figure out what other things that can help us have a higher success rate, possible higher success rate, whether it will work or not, we don't know. But at least we have to make that attempt to ensure that our success rate percentage as you speculate is higher than lower. So something that we would want to do is maybe hold on to something that we plan to do. So hence, we would not like to go into a hurry and try and do something. We will go a little more open eye. And when we do that, we remain committed to some of those. So that would be how we will do.

We have next question from the line of Samarth Singh from TPF Capital.

I just wanted to go back to the question that was discussed earlier regarding the cash balance. So is there a maximum amount that we have sort of borderline as the cash balance that we need, regardless of the economic scenario and then the remaining is all excess cash?

See, this is really speaking very difficult to answer, how much cash is comfortable. I'm not sure whether -- I mean, with our kind of cash reserve it's very difficult. I mean, if you're sitting in really piles of cash, et cetera, that maybe it's a little easier to discuss. Easier to answer possibly. But with our kind of cash reserves at INR 500 crores, et cetera, it's a very difficult to say whether is INR 300 crores enough, is INR 400 crores enough, is INR 600 crores enough very difficult to say. Because you're looking at -- if you were to look at an M&A, et cetera, I really don't know how much of it is -- would be required to look at an opportunity like that. CapEx, unlikely OpEx unlikely, working capital really, no. So that is not where cash would be required. But if you're looking at some of these areas, yes. And as of now, as I said, our policy has been more -- be conservative, conserve the cash. It's not going anywhere. It will come back to wherever they need to be at going forward. So really speaking, that's the stance we have taken. So if you will say, do you have a model for how much cash should be enough? How much should we be seeing? With this kind of a volatile market scenario, I would say, I don't think we are -- we have been putting in too much of stress or attention to that.

Okay. And 1 last question. Do we have an estimate on what the total spend will be for the Worli office?

Sorry, can you come again, please?

The total spend for the Worli office?

Worli office, I'll get back to you on this numbers. I had some numbers there. I'll just get back to you. So I'll come back to you.

We have next question from the line of Sarvesh Gupta from Maximal Capital.

Sir, I just wanted to understand what has been the number of -- the sales number for June? And what is the trend that you are seeing in this month compared to June?

See June, obviously, as I said, we had a good month. Now let's not get into the exact numbers, et cetera, but June was clearly a good month. If April was a crash, so obviously, May-June were good and June was better than May, right? But July clearly is headwinds. July will clearly be definitely lower than June. How much lower, et cetera, I don't know. So really speaking, at this moment, I would like to be a little cautious to say that there will be good growth that is happening. Plus anyway, you have this quarter, which is the monsoon quarter, you always see there is a dip in our sales. I mean, the fourth quarter is always the best of our months. First quarter, third quarter, decent well. And second quarter is the one where it really goes down, right? So this quarter, anyway, you were expecting a little lower sales. But July, clearly, the atmosphere is also much lesser in sort of the typical 15% drop that you see quarter-to-quarter. This quarter, maybe even higher. I don't know. So -- but July looks to be difficult. Yes.

Understood, sir. And in terms of your ad expense, I assume that it has been very low for the June quarter. So will it be -- so Q2 of this year, would it be similar to Q2 of last year? Or how are you planning on that front?

See, again, that's where this volatility comes in. If you had asked me this question 7 days back, I would have been a little more confident than -- I would have been telling you, yes, you can expect that, and you can take that as a guideline. At this moment, if you ask me, I really don't know. Because if what we are seeing, this thing, you might be thinking that I'm reacting too much on the news that is coming out as far as these lockdowns are concerned. But really speaking, we would rather be prudent rather has been going too aggressive in terms of ad spends, et cetera. So we would like to see how the market plays out. And as I said, we would rather operate fortnight by fortnight as far as ad spends are concerned. And that is how we would want to give our commitment, rather than commit for the quarter or for even the month, for example. So at this moment, it's more quarter-to-quarter existence. Earlier thought was we would want to remain on air at similar levels. But at this moment, we'll like to think. In this particular fortnight, we are still on air just like as it is, but we will -- going forward, we'll have to see how it happens.

And sir, lastly, on this M&A front, so are you actively -- is there a strategy to the new -- any new M&A that you are evaluating? So if you can highlight what are the 2, 3 metrics or 2, 3 points that you're looking at with respect to any potential M&A? And how active is that process? Because we do have cash balance. So as you said, that this can be put only for an M&A. Otherwise, there will be obviously no reason for keeping such high cash level, which we appreciate because there might be some potential opportunities in this business market.

See -- yes, absolutely. See if you look at, as far as the plays that for the company is concerned, that are pretty limited. And if you look at most of this case has been already exercised by the company in the last 10 years in some manner or the other, right? So I mean what are the plays that the company has, if you were to look at. I mean, you look at ADHO increasing salience of ADHO. If you look at playing in some of the other hair oils that are there, which was rather typical adjacencies. Adjacencies across FMCG space where we can actually capitalize on the Bajaj name. Then you are looking at within the country, looking at some of the markets where you are not represented, can we dial that up? Looking at modern trade e-commerce, can we dial that up? Because compared to our competitors, we are a little weaker in that. Is that possible? And last year, left with M&As within the country and outside. International markets clearly is an area where we are weak, and we are really not had very considered strategies going forward. Now whether that will happen, not happen, whether we will have the varying results, what kind of time line. So I think we are at the -- on the drawing board, and we are looking at that. Now in that space, both local, I mean, that is domestic as well as international, we'll keep scouting and we are scouting. Now whether it will happen, not happen just because of valuations -- because of attractive valuations -- because attractive valuations also come with rider that market conditions are also poor. So we'll have to evaluate that. But that is something there in our anvil whether it will happen, whether if you are saying, do I have an active M&A target that I'm pursuing today, no. But is it there in the back of mind? Are we scouting? The answer is, yes. So this is where we are playing.

We have next question from the line of Ankit Babel from Subhkam Ventures.

Sir, my question again pertains to your growth figure 2- to 3-year -- 3-to 4-year perspective. Now if we see the last 3, 4 years performance, now the company has 2 major issues. One was the promoter plant and second was a consistent flat growth in revenues and profits. So now the plant issue is fully over, but growth still remains a concern -- concerned as there is lack of visibility. Now I would like to know your view with a 2- to 3-year perspective, what kind of growth do you see is possible for the company? Now why I'm asking this question is because the track record is of a flat growth. And last year, in the analyst meet promoter mentioned that we are targeting for 20%, 25% CAGR for the next 3, 4, 5 years, led by a gain in market share and from the overall category and focusing purely on this or ADHO business. So one was that question. And second question is that now historically, again, if I say the last 3, 4 years or 5 years, our EBITDA margin range was in the 31% to 33%, but management had guided for increasing advertisement expenditure to certain growth. So with the next 3, 4 year's perspective, what kind of sustainable margins we should look at it?

See, while I would -- see, let's go ahead with, firstly, the direction that we had taken for the company of doubling our market share in the hair oil space. I think that was an ambition that still continues. I don't see why we can -- why we need to deviate from that ambition that we have. Now whether that would happen in 5 years, et cetera, I think we'll drop a little more strategically as to where because market conditions have also changed since those announcements were made. Today, we are looking at a far more unpredictable volatile market share. So market conditions, so really don't know whether the time lines can still be made because this year has been a washout. We don't know what impact it will have in the next year, et cetera. But that is a great ambition that we'll keep on our plate because that is something that we don't drive. Parallelly, these are also options that we would want to explore out of the ones that we just discussed. Because those are there on our plate, not too many others are there on our plate, right? So these are something that we would like to see, and we'll see what we can prioritize keeping in mind where our success chances are as higher. Now in terms of direction, while I would not be able to tell you as to what are the things we will choose, et cetera, because as I said, that you might have to wait for a few quarters before we really come out with something. At this moment, we'd rather focus on operational experience and getting our process and systems a little stronger as a company. But in terms of direction, the way we would like to do is, we obviously want to drive top line growth. That would remain a priority. And EBITDA as an absolute number, we would want to drive. So if that means a bit of drop in the EBITDA percentages, whether it'd through ad spends or whether it'd be through any other initiative that we take, that is something that possibly will happen. So EBITDA margins might look at a dip if we are able to look at the top line growth. I mean, we can't have a situation where EBITDA margins drop and the top line doesn't grow. So that is something that we would want to drive as well.

Okay. See, again, sorry to harp on the same thing again because the gap is too big. I mean the ambition is a 20%, 25% growth. I understand the COVID issue and that's the reason I am asking with the 2 to 4 years perspective. Now the track record is off of flat growth, and the ambition is a 25% growth. So somewhere in between, I mean, do you feel that at least a 15% kind of a growth figure is possible for the company with the next 3, 4 years et cetera?

See, it's a question of speculating on numbers, right? I mean, obviously, as operating manager, rather than speculating numbers, I would rather want to deliver some numbers and then talk. At this moment, I don't think I have a credibility of talking of any kind of numbers because, I mean, finally, you deliver the numbers and then you top of that this is our situation. So I would rather wait on the numbers, whether it'd be 25%, 20%, 15%, 10% or something. At the moment, we are looking at more 0% to 5%, right? That's where we are. So let's get out of that block first and then maybe look at that. Obviously, intent wise, we might have a lot of aspirations and unless we quantify them really speaking there is no point talking of numbers.

Sir, what kind of tax rate are we expecting for the next 2 to 3 years?

Yes. At this moment, the tax rate should be continuing. That MAT tax will be continuing. So our tax rate is at now 17.5%, which is down from the 21.45% that you saw last year. So that's what it remains.

Okay. And sir, last...

Sir, I'm sorry to interrupt. Would you like to come back in the question queue, Mr. Babel. [Operator Instructions] We have next question from the line of [ Disha Sheth ] from Anvil Wealth.

Just to repeat the question. Sir, when you said 17% degrowth year-on-year. So the Almond oil has been grown 25% and sanitizers have grown, if you can?

See, sanitizers, so there is no growth. So sanitizers are -- created that space for that single-digit contribution to the portfolio. Almond drops has dropped by about 23.5%.

Sir, then 17%, how is that? Hello?

So 23.5% is ADHO. Overall hair oil portfolio is 25%. And Almond drop has added to -- your hand sanitizer has added to the portfolio, the single-digit contribution to the sale. So that has made it to minus 17%.

We have next question from the line of Shubham Aggarwal from Centrum Broking Limited.

My question was related to the ad spend again. We've been guided that we'll be looking at -- to go back to 18%. And you said that we are contextually implementing the Bain strategy project will start again. So if my understanding is right that we are going full swing and we decided that we will again start implementing project Vistaar after guiding for in Q4 call. And secondly if you can give out the volume decline in ADHO that would be helpful.

So -- see, as far as the volume decline is concerned, the same volume decline was there. It was 23%, 23.5% is the volume decline as well. So there has been no price change that has happened during this quarter. So -- and as far as the -- as far as your project Vistaar strategy is concerned, I would like to change the narrative a bit. I would not say that we would come back and start the project Vistaar, when we come back. At this stage itself, we are doing whatever is the partially relevant of that project itself. See project Vistaar was a more comprehensive strategy, right, I mean, a complete strategy, both RT and GT and as to how we would want to approach the market. So entire thing, the marketing angle of it, the trade part of it, how we would want to go into distribution, et cetera. In this COVID situation, some part of it is relevant, some part of it is not. The part that is relevant, which is in terms of distribution, penetration, et cetera, we are already activating in terms of tweaking with our trade skills. Those are things we are already doing to make it a little more effective. It's more tactical kind of a stuff. The part that is requiring to look at our ad spends, looking at how the ads need to be delivered to the consumer, so that is something that we are working on, and we'll keep changing it as and when the markets open up. So it's not something that we have played up stock to wait, and then again restarted something. It's going on in continuum, and we are adjusting based on what is -- what will be relevant and what will bring as the bank for the buck in this current situation.

Okay. Just a bookkeeping question. The ASP, which you gave out at 12.97%, is this on the ATL, BTL activities? Or does it even look -- include the trade that comes and offers?

No, it is mainly the ATL, BTL activities, sir.

We have next question from the line of Saurabh Patwa from HDFC Mutual Fund.

Just 1 quick question. Based on what we have -- so we had a -- we did a lot of A&P spending in first part of fourth quarter and which -- and there was a lockdown and we lost some sales out of it. Again, there was a lockdown in first quarter and subsequently sales recovered. So would it be fair to just merge these 2 quarters and then compare it with the last 2 quarters of the last year? And see because if you do that, then it comes to fairly close kind of EBITDA margin, which you would have guided, say like, around 22% because, otherwise, we see a very sharp fall in fourth quarter and very sharp rise in EBITDA margins in first quarter. So would it be fair to assume that -- fair to compare with the merged quarters of the 2? And also taking into account a 10% hand sanitizer sale -- sorry, sanitizer sales, it won't have been there last year. So then it comes to around like 27% kind of a degrowth Y-o-Y on a merged basis. Sir, I just wanted your thoughts on that. And are we looking at -- if I look at it in this way, will it be fair?

It's a very interesting question. I don't know how you want to -- I mean judge fairness. I mean, we can cherry-pick and sometimes cherry-picking actually gives a fair picture. So let me tell you where possibly some of the flaws might remain. Now while we add these 6 months together, and obviously, we can do an analysis against the previous 6 months, obviously, it misses out that entire story of what happened during, let's say, the 23rd of March to the 15th of May or 20th of May, as far as retail offtakes are concerned. I'm not talking about primary sales, secondary sales you might have recovered, as I told you in my narrative, I mean 7 days of sale, that -- 7 days of stocking that dropped in March came back in June, et cetera. I mean, all that is fine. But the retail offtake that went off completely, that is not something that you can replicate and do a modeling to try and match saying that, okay, this must have been the impact of it. So I really don't know how you would be able to do that math in terms of the top line growth. So that minus 27% that you are talking about is not something that I would be able to do a one-to-one mapping because then we have to get into speculation mode. Had then 23rd March to 15th April been consumer offtakes being normalized, how can I normalize? So I mean you guys are better at modeling than I am, so you would be able to do that. But yes, so really speaking. But if you're looking at the base absolute numbers in terms of EBITDA, et cetera, yes, I think you have a good point there that the base EBITDA as a percentage numbers, if you look at, that remains more or less similar. So really speaking, that is where we are today. We have been able to recover some of the lost ground. I don't think a great work or something that has happened in this quarter. But clearly, some of the lost ground that we lost in March, we have been able to come back. So I don't think there's some more to be read into this.

Okay. And just one thing on this large-priced SK, which you mentioned. How much they would have broadly contributed this quarter? Or maybe how much incrementally they would have contributed more from the normal trend?

Just let me look at the numbers. I -- 300 and 500 -- let me revert back to you. I don't have it offhand with me. I know that the sale went up. Let me just revert back to you. Let me just tell you this. Just hang on, give me a moment. So it is basically, if you look at, there has been, let's say, 500 and 300, if you were to put together, from a 24% this thing, the contribution has gone up to 26.1%. So clearly, a 2% increase of contribution that has happened. In fact, if you look at 200 ml, their contribution has gone up by about 2.5%. So if you take 200, 300 and 500, the contribution of these 3 packs is more than 4.5%. So that's a substantial jump.

We have next question from the line of Parthiv Jhonsa from NVS Brokerage.

Sir, almost all my questions were covered by other participants, but I have 1 question. You said the early July sales will be impacted, and June was much better and all. So can we just throw some light considering right now, degrowth in the volume and value of -- across the segment. And even you said that sustaining the top line -- we are trying to sustain the top line and whereas we don't mind compromising EBITDA to a certain level. So my question is what kind of top line do you see going forward, maybe, say, next 2 or 3 years? And what is the best possible EBITDA margin you are comfortable with?

So I would say, again, this is a little bit of a speculative situation.

Yes, that's fine. I just wanted to understand your internal understanding of the company. What do you feel going, say, today, we are at about INR 800 crore, INR 870-odd crores of top line in FY '20. And what do you feel by say FY '22? And what kind of EBITDA margin you are best comfortable with? That below this, we are not comfortable. Above this, anything is fine for us. Your internal understanding.

Absolutely. Fair enough. So I'll just begin at a very, very broad level and something to do with exact strategy that we'll come out with or whether they'll match or not. If we're talking on a very broad level in a thought process level, I would not have a situation where we are not touching double-digit top line at any particular year come what may. Now this year, obviously, we will not do that. But this is an aberration year. I would like to think this is an aberration year. So that is something that we would want to do as the thing. Now how much of double-digit, et cetera, I don't know, but that is something that we would want to do as an organization hair oils, otherwise -- I mean whichever way, wherever our questions lie. As far as EBITDA is concerned, clearly, I don't think there is a huge drop that we would -- I would be comfortable with. I would like absolute EBITDA to grow. And then at least a 2%, 3% kind of a drop is I'm fine with, nothing less than that.

EBITDA margin?

EBITDA margin. Nothing more than that drop because that will again structurally start paying out with us. And that is not something that we would -- see, this is something that we have built up over a long time, a strong gross margin orientation a 65% plus kind of a orientation in gross margin. Now that is obviously a little Utopian if you were to proliferate the range. You would not always build such rock star brands, which in the FMCG markets, where basically you can operate with a 2/3 kind of a gross margin. So this is -- this may not be replicable. But we would like to build brands which are sustainable on their own. That is something that is very, very clear. Not even at a incremental costing or a marginal costing basis. Why? On its own, they should be able to stand up on that.

Okay. And this quarter, I think you had like a mid-teen drop in the top line. So what is your expectation for FY 2021?

Again, as I said, I mean, I don't know how much July will end at. So I would not want to speculate as to how 2021.

Okay. I think we will be better after H1 result, I feel.

See, if you have some stability, even if there is a market share as, if you or, this is what is going to remain, I think I can give you a number. Otherwise, it's just in the realm for speculation, not indirect.

We have next question from the line of [ Sailesh Kumar from Insight Edge ].

This question is for Mr. Jaideep. An year ago, management had articulated that they want to grow hair oil market say from 10% to 20% and top line to something around 4x of the existing top line. So my first question is, does that vision still hold? Or are we reworking on that? And if that vision holds, how much role Almond Drops hair oil is going to play on that? And what other products will be helping us?

So 2 actually a little bit correction. One is that it was not stated that top line will go by 4x, it was bottom line will take an increase of 4x. Top line, I mean, with a stable kind of a market, it was expected that the top line will be, I mean, double or a little more than that, not 4x. So that's -- anyway, that's besides the point. Second thing is the vision was growth in hair oil itself. The vision was not outside hair oil how can we grow this top line. So that was the stated vision. And the point remains that, that vision then also play in conjunction with other strategies in the company. One single vision need not be forbearing in the single vision. That vision still holds. I don't think there is anything in the company that weakens the vision or anything that the company is going to do or trying to do is going to change that vision completely. Now whether we end up with what kind of numbers, et cetera, it's something that we'll have to see. As a company creates a vision that is not always that it will always be able to reach that vision. That is something that we want it at the end of the tunnel, that is where we want to go. That's the aspiration. And that aspiration for us still remains because we are still a very, very strong, predominantly -- not predominantly, only hair oil's company, and nothing is going to change in a hurry. Parallelly having said that, parallelly, we also explore where else we can play, if at all, and then we will explore.

Sir, just if I may ask, one. Say, 5 years down the line, though it is too distant in the future. Today, ADHO is something around 90% on an average. What contribution do you see or does the company see ADHO will be making in the top line, 5 years down the line?

See, ADHO will remain predominant player. But what percentage it will contribute, I really cannot say. It's a function of what we are able to deliver as a -- I think strategically, as I said, we will be looking at maximizing ADHO's strength and looking at what else we can deliver through ADHOs as the Bain strategy give us. I mean there are a lot of other spaces that we can play into. I mean, spaces have been geographical and market pack size that we can play into. That is something that we will try and exploit. But what percentage it will contribute, et cetera, is a function of what strategic directions we take, which will also keep evolving because this is not a company where we have a strategic direction with a lot of portfolios, and we have had success in that. So if at all we see something going forward, maybe we will dial it up, et cetera, really speaking very difficult to comment on that. But yes, I understand where you are coming from. So overall, if that were to be successful, and that's a big if, if that were to be successful, ADHOs naturally salience will go down as a company.

We have next question from the line of Shirish Pardeshi from Centrum Broking.

Just a few questions. I think most of them are answered. I just wanted to understand this project Vistaar, which is run by Bain. We still have the continuity with Bain & Company in terms of consultancy or we have dismantled?

No. See, if you look at the project itself, I think -- let me just clarify what the project was. The project was clearly -- I mean, the headline project was very clear that how do we accelerate growth through this strategy. So this was divided into 2 parts. One is in terms of looking at partitioning of each of the states, micro segmentation of the states and looking at opportunities in each of the states, we said that the states are completely different. I mean, India contributes to multiple countries in that sense. And hence, let's look -- treat each of these states separately, and especially the states we are interested in, which is a Hindi-speaking markets, right? So that is what we embarked on. We started with West Bengal then went into UP. The second part of the Bain work that they did with us is actually help us implement some of the strategies. Basically handhold us into how we wanted to implement this strategy. So at one end, they were doing the strategic work in terms of partitioning, looking at what other segments we want to operate, how we would want to penetrate, et cetera. So that was happening. And with a lag, the implementation was happening. So we started this work in July. The West Bengal got started implementation. Then the partitioning, et cetera, continued. UP got started the implementation. So Bain -- we had Bain for the implementation of these 2 states. It was more a learning exercise for our own people, the marketing people, field people, just to get this understanding as to how we would want to implement, right? So in the month of January, February, March, we also fast-tracked the partitioning of all the other Hindi-speaking markets. And most of the markets of interest have already got partitioned. So that partitioning was completely implemented -- already done. So all the data is already available with us for us to work on. Now it's a question of the implementation and the 2 implementation already a lot of learning has happened for our own team as to how to implement what strategy, directions we would take. So you have to take a call whether we still want participation in terms of implementing certain tactical moves that we have or we would want to do it together. At this moment, we have decided that we will take it on ourselves because this is something. And if you require help handholding once more to help us into implement these tactical moves, how do I operate a trade? How do you differentiate trade schemes, et cetera, which is obviously a far more evolved than what earlier we were doing. Obviously, there's a lot of value that happens. If we feel that we require help -- to help us implement, we'll have that. But at this moment, strategic work that was there has already been done. There's no additional strategic work that is required.

Okay. So the consultancy charges, which we have paid in the FY '20 would have the same effect in FY '21? Or will have on a lead basis?

So that's what I said. So in case, we -- at this moment, we are seeing whether we can implement whatever has been given to us and whether we can implement in our own. And we have already, as I said, contextually, we are already implementing some of the recommendations that have come out of the thing. So at this moment -- for this particular assignment, whether we will, again, in this with Bain or something, we really don't know. I mean, at this moment, if you are able to implement what we have decided for us, that we might want to continue with that. If we feel that, no, we are not able to implement what has been recommended to us, maybe we'll engage back. At this moment, the thought is more towards the former than the latter.

Okay. My second question is on CSD business. I mean last 7, 8 quarters, CSD business is very, very volatile. And we are lucky that in Q1, you have said you got about INR 3.5 crore order. Do you think this business has some potential in the rest of the year?

See, CSD business, clearly, if you're looking at today, the concern in CSD is more than the business, there is a clear concern as far as the credit that is -- that we are exposed to, right, even with this small kind of business. One thing that we want to be clear is that we don't want to be in a situation where we get stuck. So this is something that we will also treat a little carefully because CSD itself the structuring has changed. Today, as you are aware, people that -- they can go, there is a limit to how much they can spend in a CSD canteen as far as any of these armed forced people are, right? So a lot of structural changes have happened. We would also like to -- we would obviously like to keep a watch on CSD and try to maximize as best as we can, but we are also wanting to keep a close watch on the credit that we need to give in terms of the debtors, and we would not want to go haywire on that. So we would not want to go aggressive with any customer, whether be it modern trade, whether be it in -- whether be it CSD or anybody else, where credit, even -- not even a risk, even if there is a longer period, we would rather want to avoid that and playing in places where the credit is much more less. ET, as you are aware, we operate with a 0 credit situation. Everything is advanced. That is what we are comfortable with, we want to continue.

Okay. My next question is on slides while you have given value and volume growth on the category, would you be able to help me what is the Q4 category growth for hair oil and Q1 category growth decline?

Q1 just the Q4 because I had a bad growth. Let me just dig out the Q4 growth.

So what I'm looking for light hair oil and overall?

Okay. See, overall, YTD February, as I said, was -- I think it is part of the presentation that you are seeing, 3.7% growth as far as MAT level is concerned. And March had a decline of 6.9%, right?

I got that. I was asking for Q1 -- I mean, Q4, Jan-March and April-June.

Jan -- April-June...

Shirish, you can take this number off-line with me.

No, one second. So Shirish, let me understand your question first. You want April-June of last year, is it?

No. I'm saying FY '20 Jan-March.

June data is not yet out, right? June data will be out by 21st of July. So I have April and May at this page. July -- June, I don't have. I mean, the market -- the data is not there. Nielsen has not yet come out.

Okay. Don't worry. I will it take it from Kushal.

We will send it to you.

My next question is on...

Yes, I'm taking note of it. We'll just send it to you.

Sir, I'm sorry to interrupt. We have to end the call due to time constraint, Mr. Pardeshi.

Just last 1 question. I mean, since you have not discussed, I am asking. If maybe you can say something on the raw material because we feel that there is a decline in LLP. So how do you see the rest of the year for raw material?

See LLP, as you saw, I mean, our costing is at INR 56.64 or some such number, right, I mean, which is basically our average costing as far as the cost of material is concerned. Now obviously, that is because we are carrying forward earlier higher-priced LLP. At this moment, our landed cost of LLP is about INR 48. So going forward, obviously, that benefits will accrue because now we'll be consuming price at a -- which is at a much lower price. On the other side, you see RMO, which is all on the upward trends. RMO is going up. So overall, you might see about a 1.5% to 2% kind of a change in terms of pricing, which we will try and see how we can get back to a customer through trade offers, consumer offers, trade schemes, consumer offers.

Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr. Manoj Menon of ICICI Securities for closing comments. Over to you, sir.

Vikram, I think it is inappropriate to say we are closing the call due to time constraints. This is one the longest calls an hour and 50 minutes. And the personal thanks to Jaideep, Maloo ji and Kushal for actually taking time out and responding to about 18 investor questions after a detailed presentation in the beginning. All the best team. Over to you for any final comments.

No, thank you. It was, in fact, very interesting. This was my first investor call. I have been attending Board meets throughout my last 20 years, but this was the first investor call. So it's a new experience for me. And I take all the guidance from all of you guys. Lots of questions, which are pretty thought provoking from our end as well. And we would also like to factor that in as we go forward. Thanks so much.

Thank you very much, sir. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes today's conference call. Thank you for joining with us, and you may now disconnect your lines.