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

Good day, and welcome to the Bajaj Consumer Care Q2 FY '21 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon from ICICI Securities Limited. Thank you, and over to you, sir.

Hi. Good morning, everyone. It's our absolute pleasure to host the 2Q FY '21 Results Conference Call of Bajaj Consumer Care. The consumer sector results gets kicked off with Bajaj being the first result. It's a stock -- business which we like, and we are firm believers in the turnaround piloted under Mr. Jaideep Nandi, the Managing Director, who's here on the call today; Mr. Dilip Kumar Maloo, the Chief Financial Officer; and Mr. Kushal Maheshwari, Head of Treasury and IR. Over to the management for the initial remarks, and then we'll open the floor for questions-and-answer after that. Over to you, sir.

Good morning, everyone, and thank you, Manoj and Vismaya for hosting this call. My name is Jaideep Nandi, and I am joined by my colleagues, Mr. D.K. Maloo, the CFO; and Mr. Kushal Maheshwari, who's our Head of Treasury and Investor Relations as well as some of my colleagues from our management committee. With the lifting of the lockdown restrictions in phases across India, we see signs of recovery of both economic activity as well as consumer sentiment. I think it's a sign of adapting to the new normal. With the quarter -- while the quarter saw proliferation of COVID-19, the FMCG business showed signs of recovery in the second half of the quarter, as you can see from the results of the hair oil growth, so July, August was pretty good as far as Nielsen data is concerned. The logistics and distributions were back to nearly pre-COVID levels though sporadic disruptions still remain due to localized lockdown restrictions, and we think that this will continue for the next 1 or 2 quarters. The company reported a sales turnover of INR 221.76 crores for the quarter, with a growth of 5% over the same quarter of previous year. The EBITDA for the quarter was at INR 63.99 crores, which is a marginal growth of 0.6% over the previous quarter -- previous year, sorry, previous year same quarter. The EBITDA to sales ratio was 28.9%. The gross margin was at 65.8% as against 66.2% in quarter 2 of 2020. The marginal drop was due to change in the product mix with a little higher contribution of Bajaj Amla Hair Oil and sanitizers, both put together contributing to about 5% for the quarter sales. The PAT for the company was at INR 57.25 crores against INR 57.29 crores, which is basically flat during the corresponding quarter of the previous year and -- previous year. The commodity prices remained inflationary during the quarter with LLP prices showing a gradual rising trend. Refined mustard oil prices has also been increasing, with supply constraints and rising global edible oil demand. During the quarter, the benefit of LLP prices was partially offset with increase in RMO prices and other packaging materials, thereby contributing to a marginal gain in gross margin as compared to previous years. This is specific to only raw material and packaging material costs. There has been a recovery in hair oil category in the months of July and August, with 0.5% value growth and 2.7% volume growth after a quarter 1 decline of 25%. The year-to-date August hair oil market decline remains at 15% by value and a decline of -- a decline of 15% by value and a decline of 12% by volume. Clearly, the consumer down trading can be seen from the difference in value and volume decline of 3%. Rural India continues to perform better than the urban markets, aided by government relief packages, agricultural boost and reverse migration of labor. Urban markets declined at a lower rate of 6.4% for July and August, as per Nielsen while rural growth continues, and it has what, 9.7% for the same period, positive 9.7%. For the company, the approach has been to maximize the available growth opportunities by driving our distribution and penetration in rural markets. The van operations have been scaled up steadily during the quarter. The urban markets continue to be under stress due to partial lockdowns in some of the markets with wholesale showing signs of recovery but retail still struggling. As a result, the rural markets have been outperforming, and there has been an increase of our rural contribution to about 52% from 44% earlier. The company continues with its policy of completely nil credit to distributors and super stockists in general trade with invoicing continuing only against advanced payment. With a wary country with an uncertain economic outlook, the consumers are clearly displaying value for money purchase behavior. To keep pace with this changing consumer sentiments, we have launched new SKUs in both ADHO as well as Amla with adequate promotional offers to both trade and consumers. We'll continue to monitor the same, and react accordingly as we see the market [Audio Gap]. Modern trade channel has been under severe stress post COVID-19 due to entry restrictions and closure of malls in most cities and towns. The pressure on this channel has not eased much in Q2, and it continues to decline for us as well in the quarter. With the festive season around and the relative easing of urban markets, we believe modern trade channel will do better in the coming quarters, which we need to see how it pans out. E-commerce has shown promising growth figures in the quarter, albeit on a very, very small base. We see potential in online retail, which is gaining consumer preference across cities and big towns, and we intend to make this one of our future growth drivers. There has been a significant ramp-up in digital marketing in the second quarter, which has also helped drive the e-commerce business. International business has recovered in this quarter across markets wiping the deficit of the first quarter as markets continue to ease up. We will continue to approach this market tactically from the current year. During the quarter, the company upped the investments in marketing through sustained TV, print, digital media. And as a result, advertising and sales promotion expenses were back to the pre-COVID levels of about 18% to sales. The media spend strategy was rural focused in July and August to capitalize on the rural market uptake. ADHO has been restaged in quarter 2 with new and improved formulation, the benefit of 6x Vitamin E and enhanced nourishment to reduce hair fall. The launch is being supported with integrated marketing campaigns across TV, print, digital and on the ground visibility from September onwards. During the quarter, we introduced 3 new pack sizes in Bajaj Amla Hair Oil, the 3 ml sachet, the 300 ml and the 500 ml over our existing 3 SKUs of 37.4, 80 and 160 ml so that now we have a complete range in Amla at different price points. Amla has also been a focus in rural markets, which is being supported with the brand initiative. Bajaj Anti Grey Hair Oil, a digital-first brand, has been listed on all major e-commerce chains in this quarter. Sales remain low currently, but we remain committed towards investment behind the brand, primarily through digital. Nomarks hand sanitizer had shown good response during the initial periods of lockdown. However, the sales have slowed down due to crowding of the market with numerous players offering high trade discounts. It makes me very proud to announce that our Paonta plant has also got the Golden Peacock National Quality Award for the year 2020. As a company, we have been increasing our usage of automation and technology, which is being planned and implemented across various functions in the organization. The management committee of the company has also been working on to upgrade the systems and processes in order to improve operational efficiency -- efficiencies and make the organization future ready. With that, I end my opening remarks and open the session for questions.

[Operator Instructions] The first question is from the line of Prakash Kapadia from Anived Portfolio Management.

I had 2 questions.

Mr. Kapadia, can you speak closer to the handset, please?

Yes. Now is it audible?

Yes, sir.

Yes. I have 2 questions. One on sanitizer sales, what is the contribution to H1 and what kind of demand trends are we currently seeing? And secondly, on urban markets, do we see migrants coming back and with festive season, what's the outlook on urban demand?

See, if you look at sanitizers, clearly, the sentiments that were displayed in the first quarter, I mean, clearly, definitely by us, and I think quite a few of -- many companies, not only across FMCG, but across many other companies, clearly, that way it has not panned out. So as a result, while if you look at H1, where the contributions were close to single -- mid-single digit, that contribution has nearly halved in this quarter. And now it is basically a tactical thing where we will look and see how the market pans out. At this stage, it is extremely crowded. The discounts that are being offered in the market, there is not really money to be made. And if you look at -- if you really want to establish the brand, the kind of spend that you would require to put in behind the brand, really speaking, may not be the best way forward at this stage. So we'll keep watching this space. At this moment, it's not one of our key focus areas. We wanted to take it as a tactical opportunity. We made -- took advantage of it. At this stage, we are going easy on it. It's more of now clearing -- how do we clear our inventory and we remain more or less safe. So that's as far as sanitizers were concerned. As far as urban demand is concerned, clearly, we've seen an uptick coming up while retail is still struggling. The one good thing that we see is wholesale has come back quite substantially back, especially in the months of August and more so in September. So that's a pretty good sign so that we see that more distribution is happening, the markets are really opening up. So retail, while it is still struggling, wholesale, we see some positive signs coming up. So we are doing our bit to see how we can get into the larger urban markets. Usage of digital media, we have ramped up our usage of digital media, not only for -- not only for our media strategy, but also to look at how we can tap the urban market, a little bit of the urban, let's say, the new consumers, the younger consumers, et cetera. So we are also changing a bit of tags there. It's mainly ADHO-driven but also supports some of our lower brands like AGHO, et cetera, which is our Anti Grey Hair Oil, et cetera. So that's what we see. So our thinking is that given the festive season coming up and given that government is also making it the best way to open up these markets, we see urban in quarter 3 to be doing much better than it has been in the last [Technical Difficulty].

And lastly, from my side, if I look at staff costs, they are looking at a flattish kind of trend on a first half basis. So is there some variable, which is performance-linked, which is not coming through, that is why this flattish trend? And would this trend in employee costs continue for the rest of the year?

See, the employee costs will continue because what we have done is we have done 2 things. During the middle of last year, we have done a round of employee rationalization. So those costs still sat on the back of the numbers if you look at the P&L of last year. So those are -- that's why you are seeing a flattish kind of a base this year. We've already factored in -- we have actually announced our increments this year, that is stable, right from April. So that has gone through and those are all factored in. I mean, those were all provided for in the past. So there will be no impact, obviously, on the P&L but that is what you will see. So structurally, not too much changes you will see as far as employee cost is concerned. But a bit of restructuring is happening across the -- a little bit at senior management level. So -- but in terms of basis points, you will not see too much [Audio Gap].

The next question is from the line of Saurabh Patwa from HDFC Mutual Fund.

I just wanted to know, sir, have you seen any trend in terms of SKUs in terms of size, like the larger size getting sold more because people would want to come out more frequently. Any similar or any other specific trends that you would want to highlight?

See, clearly, what we have been seeing, and this is not a quarter phenomena but for the last 3, 4 quarters, and obviously accentuated in the last 2 quarters clearly is the movement towards the larger packs. So even before that, it was a little different as a reason. Before, let's say, just if you take 2, 3 quarters before the lockdown, in fact, urban demand was far outpacing the rural demand, right, because rural was really struggling. So we saw a gradual shift, at least for our SKU sizes towards the larger packs but in the last 2 quarters, clearly, there has been a movement. For example, if you look at ADHO, the 400, 300, 500 ml, there has been a nearly about a 6% -- basis point change that has happened from, let's say, let's say quarter 2 of last year versus quarter 2 of this year. So that is the kind of movement -- shifts that we are seeing. So clearly, the answer to that is yes, and hence, we are also ensuring that, that is [Audio Gap].

So does this make any impact in the kind of promotional expenditure planning which you would do? As in -- the target audience would be slightly different, right?

Yes. So you -- obviously, you play that tactically. And actually, you increase your consumer offers accordingly for the larger packs, et cetera. But notwithstanding the fact that we are also very, very cognizant of what is happening at the lower end. For example, if you see that we have just launched our 35 ml, which is a INR 20 pack, which clearly was a gap as far as our portfolio is concerned. If you look at, we had a INR 1, we had a INR 10 and then straight away we went into the INR 35 with our 50 ml. So there was a clear gap as far as the INR 20 is concerned, which is what we have now just filled up that gap. So we are also cognizant of what is happening at the lower end, but yes, at the top end, the customer base is different, and we have been trying to support that with consumer offers, yes.

The next question is from the line of Percy Panthaki from IIFL Securities.

Jaideep, congrats on a good set of numbers in these difficult times. I just wanted some information on your sales breakup. So the overall sales growth is 5%, but can you tell me what it was for ADHO and what it was for Nomarks, please?

See Nomarks continue to decline, let me start from there. So Nomarks continue to decline. But for the first time in the last 2 quarters, at least the last 3 quarters, if I can say, ADHO has shown a growth. So that's good sign. So ADHO is at a 2% growth at this stage. And the secondary of ADHO has grown at 5%. So that's a good thing where we are not building up inventory, but at least, there has been a good growth that is coming up. So ADHO has grown. Amla, obviously a very small base. So that's grown. So overall hair oils have grown at a decent clip but we have obviously had a setback from our Nomarks range, clearly so, yes.

And sanitizer contribution to overall sales would be how much?

As I said, I mean, 5% is both Amla and sanitizer put together and sanitizer is lower than Amla, so yes.

Okay. Okay. But Amla is there in the base also, right? So why is it a contributor…

But as you can understood, Percy, I mean, last year, Amla was not one of the large focus areas. It's not a large focus area even today. But clearly, we have -- because we have the advantage of the rural distribution through vans. So obviously, we wanted to do a bit of RAIN Selling. So that's where we have gone in as well as we see some of the urban markets like UP, Rajasthan, Punjab, MP, some of these larger Amla markets where even in the rural, large packs sell. So we have also introduced our 300, 500 ml. And we see a tactical opportunity as far as the INR 1 pack is concerned. So those 3 packs have got introduced in Amla, and hence, you see -- again, it's a very similar situation as the e-commerce numbers as far as we are concerned. The bases are small, so the numbers look high but we need to see how the future pans out.

Sure. Secondly, can you tell me what were your distributor days as of 30th June and what they were as of 30th of September?

See, actually, Percy, if you look at the non-sanitizer, and I would like to spread out -- obviously, sanitizers, we have some distributor days, so I'll clearly say that. And that is something we are seeing how we can liquidate that. If you take out the non-sanitizer, everything put together, Nomarks and the entire hair oil category, it is exactly at 30 days. It was 30 days in June and 30 days now.

Understood. And lastly, on ad spend, in this kind of an environment where ad rates are only down and even the intensity, although it has come very close to pre-COVID level, there might be some gaps there. In such kind of a situation, there's an 8% ad spend growth. So can you just break it up a little bit in terms of, is it focused on Amla more because you're pushing that? Or is the growth in ADHO itself the same at around 8%?

So if you look at -- I'll just make a technical correction. It's not only ad growth that you see, it's ASP growth, which is sales promotion as well. And as you will recall -- I mean, there is a large amount of brand selling that we are doing. So a large part of the brand sales, that sits in sales promotion. So there's a bit of sales promotion that comes in. And ad spends really remains more or less similar. The other correction I would -- and this is a minor correction is that the ad rates have started going up. It was low, absolutely, you're right in Q1, that has started going up. So this is point two. So there has been an increase in ad rates as such. And third point is we have also been spending on digital. So we have gone into digital. So if you look at absolute to absolute, ad spends have remained more or less similar. So both -- because sales have remained similar, ad spends as a percentage to sale also remain similar. The growth that you see comes out of sales promotion, which is those van operations that we have got, which itself is returning decent double-digit EBITDA for us.

Understood. And just one general question on the lockdowns, et cetera, if I might be permitted. So the urban growth is lower than rural growth, I understand that. But although there have been local lockdowns now, it is nowhere similar to the initial lockdown we had. And I don't think there's any shortage of goods in the supply chain or availability at a retail front. That is my perception, I don't know if I'm wrong. So is it clearly true to say that urban growth has been affected by lockdown? Or is it just that there is a demand erosion in urban, which is showing through in the numbers?

I think both, if you ask me. I really will not be able to comment absolutely whether there is a demand erosion or not because that is something that you will have to give us 1 or 2 more quarters to see whether there is a structural change in market dynamics itself or not. That's a little large statement to make. I mean, we can all speculate, but that's a little difficult. But at this stage, clearly, what you're saying is correct, urban demand is definitely on the upswing. September clearly shows even better than what we saw even in July, August and April to June [indiscernible] disaster. And the other side is, if you look at internally, from our perspective, we have been also very, very rural-focused till August, if I were to be specific, not even July, till August, we are very rural-specific, both in terms of our -- the way we approach the market, the way we approach our TV spends, which we have tweaked to ensure that we get higher GRPs in the rural markets of UP, Bihar, Jharkhand, Rajasthan, MP, all of these markets. So obviously, we have performed much better than what we see as far as market difference is concerned between urban and rural. The other side to look at it is maybe there is more scope for us in the urban markets because if rural has grown so much and urban not that much, maybe there is scope for urban markets, which is where maybe we'll focus, which is where we have shifted our focus from September onwards, where we are also spending some there as well.

The next question is from the line of Shalini Gupta from Quantum Securities.

I just wanted -- I had a couple of questions. See, our raw material prices, basically your mustard oil prices have started moving up. So have you taken any kind of price increase during the quarter?

So in this -- see, at this moment, if you look at, the LLP prices have not -- LLP prices are clearly going up. And so the prices have gone up from, I think, INR 57 -- just give me the numbers. One second. Give me 1 minute. So the LLP prices have gone up from INR 50.79, which we have reported in the investor presentation. At this moment, it is sitting at INR 52, right? So you're right, absolutely there and so as RMO. RMO prices is now at about INR 108 from where it was in Q2. But at this stage, given the market demand, et cetera, we would rather tweak with the other components of the expense numbers. So more on the overheads that we will be looking at whether to tweak to ensure that we protect our EBITDA margins, not really looking at an increase in prices. At this moment, we would rather wait for the demand to come back rather than look at it. As you are aware, only 1/3 of our cost is raw material cost. So that has a 1/3 impact as far as gross margins are concerned, accordingly. So every 3% increase to raw material cost has a 1% impact on the EBITDA margin. So we would rather wait rather than jump so quickly to a decision making. And RMO and LLP are not the only contributors. The 2 put together, the increase, let's say, if the average increase is 4% in these 2 put together, the total RMC plus TMC that is material cost increase will be about 2%. So anyway, that will be half. So if you look at -- that is a 1/6 impact on the EBITDA margin. So we would rather not so hurry so far. And we'll also monitor the market. We'll see what the other bigger players are doing and accordingly react.

Yes. Sir, and then I -- just correct me if I'm wrong, you said that the focus for Bajaj Consumer will be on the larger packs. But actually, I mean, the consumer is more and more value-seeking now. So would you not want to focus on the smaller packs because that is what the average consumer wants?

Interesting question, Shalini. So the point is the consumer is value seeking. They're not looking for a lower value pack. Value seeking is more value for money, whereby you're looking for higher ml per rupee spend. So that's where the clear shift is happening. The shift is happening according to me for 2 reasons. One is, obviously, they are value seeking, so they're looking for larger packs, which give a larger ml for the pack size that is there. The other is, obviously, for the COVID situation itself, where you would make lesser trips to the marketplace. Not everything is bought online. So when you are physically going to the shops, you would want to buy a bigger pack so that you have to make fewer trips to the market. So obviously, we see that trend happening. And hence we have been practically looking at that. But we -- as you rightly said, it's also -- and I guess I've said on my initial briefing itself that we are also very, very cognizant of what is happening at the lower end. So that INR 1 pack is already there. So then you have the INR 10, which is not really a large selling SKU. The INR 20 is coming out from Nielsen as one of the large categories itself. INR 20 is the highest growing category as far as hair oil purchase is concerned. That's why we have also introduced, also because of the fact that there was a large gap between the INR 10 and INR 35. So that is something that is very clearly in our focus. Just because of the fact the contribution of these larger packs are going up doesn't mean that we have lost focus. For us, ADHO is bread and butter. So we look at all the SKUs. I mean, we do all the cuts at all levels, whether be it at state level, whether be it at channel level, retail, wholesale, sub. At the channel level, retail level as well as SKU level, we do all the cuts and look at where we are going wrong and what corrections need to be done, and we keep reacting accordingly, yes.

Okay. I think like ADHO at one point of time, not too far back, used to grow at 8%, 10%, 12%. So I mean, could we see that kind of growth returning? In this quarter, at least we have done well, as in that we've grown, I think, by 2% of -- in ADHO. So I mean, do you see this -- in the third quarter and fourth quarter, do you see growth returning?

See, there are 3 factors, if I would say as to how ADHO can grow. One is obviously gaining market share, right? So gaining market share within the category itself where you have a 60-plus market share, if you categorize something "light hair oil" category, which from last year, we have stopped calling ourselves as a light hair oil player. So if you do not have a larger share and if you reach a 60%, 65%, that kind of a market share, it's very -- really difficult to really keep on growing market share. So the only other 2 ways is you win share from other categories, or you basically grow the market itself. I mean, you grow that market itself within the sub market, so to say. So these are the 2 things that anyway we'll keep pushing. So ADHO, as you are aware, we have just restaged. So a lot of advertisements, some new advertisements are just being shot. In fact, it was just shot yesterday. So it will be coming up in the next 2, 3 weeks on TV, you'll be able to see. So -- and integrated marketing, as I talked about, so a lot of things we are integrating. So as far as ADHO is concerned, we are doing whatever is possible. But we will also be looking at our other core hair oil portfolio, our hair oil portfolio and looking at other brands as well. So it will not be only ADHO, while obviously, all our entire thrust, effort, et cetera, will go on to back ADHO, but we'll also be keeping a watch on the other portfolios.

Okay. And sir, last question from my end. Sir, like modern trade, it obviously has declined for everybody. So I mean, last quarter, that is first quarter, you had put out a figure that it declined by 23%. So sir, [Audio Gap] and nothing has changed, in that, we do not want to go into supermarkets because of the air conditioning and whatever else. So would you say that the decline is similar in this quarter, it will be 20% upwards?

See, in fact, if you look at, if you do a simple math and you look at where e-commerce is part of that alternate trade and if e-commerce itself has grown by 300%, that is 4x, so obviously, modern trade would have grown lower. I mean, obviously, there's a CSD component as well. Both of them have had growth, which are -- I mean, declines, which are higher than the number that is reported for general trade, that's pretty obvious. So clearly, that's an area where the country is struggling as far as at least numbers are concerned, I mean, the numbers are lower as well as we have also not done any better than the marketplace. Our only good solace is that we have not done worse than what at least the number is coming out of but that in itself is not good enough. We need to do our own efforts to ensure that we grow. I mean, our market shares are too low, really speaking, we should not worry about what Nielsen growth numbers are. There is enough and more for us to be done. So that's what we should focus on.

So modern trade for you would be what percentage of sales, sir?

Shalini, can you come back in the queue, please?

Yes, sir. Okay. Thank you.

The next question is from the line of Tejash Shah from Spark Capital.

Sir, first question pertains to your opening commentary about rural recovery. And in fact, across categories, across industries also we are hearing the same. But now when we look at the numbers in auto and then in the NBFCs recoveries or even micro finance, the numbers are very sharp from rural recovery perspective. But even after calling out all the factors of rural recovery, our numbers or in general FMCG also or hair oil, in particular, the recovery has not that been sharp. So any insights on hair oils?

See, I don't know how you see those numbers. So obviously, we -- I can only speak for what we see in our hair oils industry and related consumer goods industry. So -- because all markets, all different segments operate very, very differently. The figures for them are very, very different. As far as our markets are concerned, clearly, we see -- as I was saying, we see also urban coming back. I mean, earlier, the growth rates in urban was in double digits. Now it is coming back and it's clearly slowly hitting close to normal, right? I mean, a normal as in the base. So that's where I can go back from. But from our own perspective, as we were saying, because we were so rural focused, et cetera, our growth rates in rural has been spectacular compared to urban. So we have to grow much higher than the numbers that we are seeing as far as Nielsen reports are concerned. So rural has really been the star for us, urban more or less is where we are very similar to what numbers we are seeing as far as declines.

Okay. sir, that comparison is on a relative basis to urban. But if you, let's say, compare rural 2 years back or 3 years back when it was relatively doing better, are you seeing traction versus those, let's say, if you index it to a particular point 2 years back, are you seeing recovery versus that point as well? Or is it largely urban and rural comparison is actually leading us to believe rural recovery?

No. See, now -- see, for our -- see if I look at specifically for -- are you talking about our business? Or are you talking…

No, no, your business, sir, your business.

If you look at our business, as I said, I mean, urban used to be higher than rural, as you are aware. I mean, urban was 55%, rural was about 45%. I mean, that's how -- or maybe 47%, 48% to 52% kind of a thing. Now that numbers have got reversed for us at this stage. And that is for both reasons, one is the rural markets, I mean, I don't want to get into that because you have heard that enough, which is rural markets are far more open, et cetera, et cetera. So that's all. The other is, we have taken a specific drive to drive rural for the last 4, 5 months. So SKUs introduced, all the van operations plus other all the trade, et cetera, that whatever we have done. So rural clearly is something that we wanted to, again, another tactical opportunity that opened up for us and we wanted to take advantage of it. And a lot of learnings have come up from those markets where we will continue the drive forward. Now coming back from September onwards, we have realized that urban is also coming back. We need to focus back on urban. So a bit of shift has happened towards urban. And now we are focusing on urban. My thought is that now you will see rural growth maybe tempering or remaining there if we can. I mean, those are stellar growth, I don't know whether we can remain at those levels, but we would obviously attempt to. But clearly, urban growth is something that we'll focus on. And I hope, in Q3, we should be reporting good numbers as far as urban is concerned.

Absolutely, sir. So last question from my side. Sir, this is now -- this September we completed ninth year of acquiring Uptown Leasing, which was supposed to be our head office or we were supposed to consolidate our different offices at one place. Now that's INR 140 crores or INR 150 crores of non-growth capital sitting on our balance sheet for now almost a long period. And even now, I believe there is no visibility of next 2, 3 years. So any comment on that? How do we see because even group's aspiration in terms of -- because we had a plan to consolidate group entities also in that office. So group aspirations also would have changed in last 9 years. So any comment on that? And in continuity on that point, how do -- he should we see our dividend policy considering that half year has gone by and there's much more -- better visibility on -- in terms of cash flow generation and prices ahead on -- pertaining to pandemic, particularly?

So interesting point. Yes, one question, but clearly 2 questions completely different. So let me handle one at a time. So start with our Uptown investment. So Uptown investment, as you are aware, I mean, you have covered that in a complete detail as to why it was done, et cetera, et cetera. So I have nothing further to add on to that. But clearly, as years go by and as market dynamics and situation changes, you will also keep reviewing, et cetera. So at this stage, the thought process of exactly what you said remain, so Uptown investment is there. We have been getting our licenses, et cetera. But the kind of pace that we had put up to set up the building and do all the investment, get our licenses, we have slowed down because of the current situation, et cetera. So at this moment, immediately, if you ask, for the next 1 or 2 years, whether some big amount, construction, et cetera, going, et cetera, I think that is unlikely. So but really speaking, it's not in my this thing immediately to take a call on that because we'll keep seeing, as things improve and -- we'll take a call on that. So at this moment, it is at status quo. Unlikely that it will change in the next few quarters, immediate future. But going forward, mid-term, et cetera, I am really not able to speak at this moment. So what will happen after a year, whether we'll get fast scaled into construction I don't know really speaking at this moment. But in the next 2, 3 quarters, unlikely any movement will happen. Now coming to the dividend policy, et cetera, we have gone through that in detail as to how we'd have taken the dividend policy. So this policy that we had discussed that this was an aberration year and it is not something that we'll continue to follow year-on-year, that stance remains. While it is the Board's call to decide as to what the dividend policy is, a lot of the points that all of you guys had said, we have put it in front of the Board, et cetera, they have taken cognizance of your points, and this is something that we hope will get corrected in time to come. So really speaking nothing to worry about on that.

The next question is from the line of Amit Doshi from Care PMS.

Sir, on the Vistaar strategy, of course, we had -- because of COVID, we had put on hold and our original target or vision of doubling our market share from 10% to 20% rather than on the light hair oil to the hair oil. So what is the kind of -- with this clarity that you have now, any thoughts on that point? Because I think last quarter, you had mentioned that it's currently put on hold, we'll see how things pan out.

So I'll correct myself once again. I realized that my communication, I think it was my -- maybe shortcoming that my communication did not come out well in the last quarter. I actually did not mean that it has been put on hold. What I tried to say is that at this moment, all the aspects of Vistaar strategy, which was a 360 approach towards all markets, et cetera, that has been put on hold and we were reacting based on what all is required for the marketplace, tactically. So that strategy continues. And as the quarter is eased up, et cetera, a lot of the things that have come out of the strategy as well as our own internal understanding, we have actually been proliferating across markets. As I had said last time itself, by March, we had completed all our Hindi speaking markets. Wherever are of interest, those markets, we have already got a full-fledged strategy as to what to do, how to do, et cetera. Now all of it is getting implemented and something more as we understand the market, as the market dynamics are changing. Obviously, at that time, rural focus, et cetera, was not that strong. Those are also -- we are incorporating that. So that part -- that strategy is very much there with us, and we are implementing part of it as well as -- I mean, part and all of it as and when we -- as and how we deem fit as well as adding on to whatever our knowledge and experience over the last 6 months have been, adding on to it and making a complement there. And that is something that will keep going on. The focus on hair oils, whether we're getting to some other portfolio or not is a separate point. There was an absolute focus on ADHO and then some of the hair oils, et cetera, is not something that is going to go. 20% or not, we'll have to see how the market pans out. I mean, you'll have aspirations, visions, et cetera, of all of that. But really our job is to ensure we have our strategies right and ensure operational excellence to an absolute as best as we can put it. I mean, that is the clear focus. And as I said, the clear focus has to be that we need to get our value growth back. And that is something that we've tended to strive for.

Okay. Okay. On the ad spend, while, of course, June quarter, the Q1 quarter, of course, had a very reduced expense, and now it has increased. However, we have been able to maintain margins. And I remember that in the original -- the strategy which we just discussed, Vistaar, that you were ready to compromise on the margin by increasing the ad spend, et cetera. So what's your thought or trajectory towards our margin and our ad spend, so if you can give some guidance on that?

See, obviously, I'll not be able to give you a guidance on that. But clearly speaking, if you look at ad spend is something, that is something that is not going to be compromised. That is the last cost item that will get compromised. So we'll look at material costs, we'll look at the traveling expenses, operating expenses of, let's say, employee costs, et cetera, all other costs, even selling and -- sales and promotional costs. Ad spend is the last cost that we will cut because that's the easiest to cut, but the impact of it is long term. So that is not something that we would like to touch on. So ad and sales promotion, which remains at 18%, would remain thereabouts. In fact, going forward, in case, in future, if you were to look at something else going forward, it might go up by a few percentage points, I mean, a few hundred basis points, going forward, later. But that obviously needs to ensure that we also have a top line growth commensurating against that. So if you look at -- say, if I had to just finish that, if you look at the strategy going forward, much later, and this is not a guidance, just a thing, you would look at ensuring that our EBITDA continues to grow, not as a percentage, but definitely as an absolute. I mean, that is clear focus. So that is something that we would want to do. And obviously, that would mean that the top line then should commensurately grow if you have to grow your EBITDA as absolute and the cost goes up.

Yes. Right, right, right. No, my [indiscernible] was only that only because initially 18% to 22% ad spent target was there in the cost of EBITDA margin, that was what was indicated. Anyways, I got the answer. The last question is, sir, I understand about the sanitizer business, you're not kind of focusing on because of crowded market or margins, et cetera. Any particular reason with Amla oil? I mean, why is that -- now you mentioned during your initial participating response that Amla is not the focus area. I mean, any specific thing that you would want to highlight? Considering that now you want to move from light hair oil to a hair oil company, I mean, especially in that light?

I'm sorry, that must be my miscommunication or my tendency to say things which are not represented correctly by me itself. So I did not mean that Amla is not a focus area. What I meant was ADHO will remain our absolute focus area, but we will also be strengthening some part of our other portfolios. At this stage, as we go forward in the next 1 or 2 quarters, it will be the hair oil space that we'll continue to work on. I mean, some of the other brands will also come into play. Yes -- sorry, so please ignore that other part, if I meant that Amla will not be a focus. So all the products other than ADHO where we feel we have some rights to win of some kind, we will continue to play on those as well.

The next question is from the line of Krishna Nagpal from Latin Manharlal Securities.

Sir, great numbers. Sir, I have one question is that what are your views on any M&A which might take place because of the cash which we have?

See, M&A, Krishna, I mean, that's an important question. I mean -- and this is something that we take it very seriously. But in my view, there are 2 sides to the M&A, which I personally look at. One is, look at domestic M&A, which is within the country. History says -- at least, in my mind, whatever history shows, most of the consumer goods company, whichever M&As have been done, at the valuation step they have been acquired, really speaking not money is there to be made after that, is how I personally see it, and I may be absolutely wrong, but that's how I personally see it. So M&As within India, valuations look too high. So this is something that we'll treat cautiously and tactically. If opportunities arise, definitely, yes. But outside the country, we look at specific pockets, and I don't want to get into which pocket; if opportunities are there, this is something that we would be interested in. But at this stage, if you look at specifically this year, this financial year, our focus would be leaned to get our house even stronger in order. And going forward, maybe next year onwards, that is also a market -- the international market is something that we may be wanting to focus on. But at this stage, I'm not giving any guidance on that nor I will be saying it is a part of our strategy.

The next question is from the line of Shirish Pardeshi from Centrum Broking.

Jaideep, congratulations for good setting. I think I've got 3 questions. The first question is purely on the channels. And as I say that, you mentioned that Modern Trade has not come up to expectation. Is there anything you will call out, any specific geography you are facing this issue? I mean, what we understand, Maharashtra has biggest lockdown, which is continuing. So any particular thing which you would like to highlight?

See, Modern Trade, I think 2, 3 factors. So clearly, the metro cities have really chunked for us. So Bombay, Delhi, so larger cities have really not done well for us. So that's clearly the indication that is coming up. The other thing that we see is not specifically geographically, I don't think it is much of a geography issue, but this -- larger city is clearly one issue; the second thing that we see is one of the larger chains really had liquidity issues and where we were -- had a large exposure. So as far as credit is concerned, it's no more a concern obviously. But that has, obviously, which was sitting on our base, so it has not come back this year. So that also has had an impact on our business. But other than that, more or less, I don't see fundamentally we have anything wrong as far as the business is concerned. That is something that we hope in quarter 3, quarter 4, we'll revise and our focus also remains on that area, yes.

If I may ask specifically how much exposure or contribution we had from Future Group to our business?

I would rather not get [Technical Difficulty].

Okay. You touched upon the wholesale recovery. Would you be able to quantify a little more where we see, Tier 3, Tier 4, what kind of contribution the wholesale has now come back? And what is the future we are looking in wholesale?

Wholesale, in fact, in the quarter actually was flat. So as I said, urban markets were down, but wholesale has been flat in the year. So that's a -- in the quarter, sorry. This is against July, which was negative. So that's a good sign that wholesale is now coming back. And retail is where we still have some more work to do. So that is as far as wholesale is concerned. Sorry, you had another question on that -- site question on that.

No, what I was asking that what is the wholesale contribution is now settling?

See, I would rather not get into the exact numbers. As I said, urban to rural divide is what I am -- just at this moment I can share with you, which is 44% to 56% -- 52% to 48% from earlier. As I said, from 56% urban and 44% rural. It has now moved to 48% urban and 52% rural. That's what it has been. And as you can understand, wholesale has been done a little better than rural markets. I think I'll leave it at that at this stage.

Okay. And just related on the international front, you have shown a significant growth. Is there anything that you would like to call out saying that are we expanding the footprint or in the similar geographies you are seeing the growth? And what could be the reason of growth?

So the growth numbers, again, these are all so low bases, really speaking, I would not get too hung up on the growth numbers itself. These are more -- one thing we have done is we are, obviously, tactically -- see one and -- first and foremost, we are not increasing our footprint as far as international markets are concerned. As I said earlier, international market is not one of our large focus areas in the -- in this year. But operationally, obviously, we would like to tighten every single area that we operate in. So obviously, some basic work has been happening in each of the markets that we operate in, which is UAE, Bangladesh, Nepal, and rest of world is a separate thing. So some bit of growth that you see, but the bases are so, really speaking, nothing to talk about. Maybe going forward, we'll see what to do in these markets.

Okay. Just last question on Amla. I think you have found that to…

Can you come back in the line? No, let us finish this question. Yes, finish that question, you're going ahead. Amla, you wanted there.

Yes. So in case of Amla, you have seen that we have restaged the focus. So is it that will expand our franchise and footprint as one of our stronger markets of ADHO like South UP, Bihar, Rajasthan? Is that the strategy which you are banking on from the distribution point of view? Or are you really trying to expand the value for money downtrading, which is happening in the market?

Not really. I mean, see, Amla -- all products, you will treat it based on the product itself. So Amla, specifically, if you look at, I mean, all these data is available somewhere at least with us. For example, if you look at the Nielsen's data for the market itself, at INR 1,600 crore market, where the main markets are. I mean, those are those 7, 8 markets. Fortunately for us, it is the same markets where we are stronger. So that's a big advantage for us. It's not where south or eastern part of the country where Amla is very, very strong. So most of the markets other than maybe Maharashtra, we have a good presence as such. And the fact that it is also a rural-driven brand other than Dabur Amla, which is obviously more urban. Most of the other Amla is sold rural base, which is where we are focused on. So tactically, it has been an advantage for us. And strategically, we think, clearly, there is some space for us to play. So that's where we continue to see how it moves.

The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

Most of the questions have been answered. Just 2 small questions. One is this growth numbers of 5% and -- in Q2 and 6% negative in H1, these are values. Can you just give us the volume numbers for Q2 and H1? And my second question is, obviously, you mentioned that we are going slow on sanitizer market. But apart from sanitizer, are we planning any new products other than the oil category?

Okay. So as far as the volume growth is concerned, it's actually same as the value growth, it is at 5%, I think. So from this year, we have started calculating the volume numbers in kiloliters because earlier we used to report that in cases, so we are also looking at numbers as far as kiloliters is concerned and -- basically liters is concerned. So that's absolutely at the same level as the value growth, which is at 5%. And -- if that answers the question. And as far as the new products are concerned, yes, if you look at, at this moment, in the next 2 quarters, you will not see any new products coming out. It's more on focus on the brands that we have. So as you are aware, Anti-Grey Hair oil was launched 2 quarters back, that is something that we will focus on the digital -- this thing. Amla is obviously a range that we have started doing a bit of focus on and as well as ADHO will remain key focus. So we really don't want to dilute too much before we have our strategy as to where we want to go, and that is not something that you will see in the next 2 quarters at least. So this is where our main focus will be at this moment.

So nothing on the cards other than the oil, right? Is that understanding right?

Not in the next 1 or 2 quarters, no.

The next question is from the line of Umang Shah from Asian Markets Securities.

Sir, could you tell me, historically, what is it that stops us from breaking into the South Indian market?

There is nothing that stops us from breaking into the South Indian market. It's mainly, as you are aware, the nature of the market itself and the nature of the products that we sell. Now our portfolio is, as you are aware, over 90% of it comes from Almond Drop Hair oil. And badam as a product does not really sink in, in the southern markets itself. So it doesn't have too much of salience as far as southern markets are concerned, which is obviously a large coconut market as well as -- even if you have some of the lacking, which is value-added coconut, it's more or less restricted to that. Having said that, yes, there have been -- because of our rural drive and some of our efforts as well, we have been looking at the south, and let's see how the future pans out. At this moment, I would rather keep that open and let's see how the market pans out. At this moment, we have not focused. Till now, we have not focused on south mainly because almond drop is not something that has a large savings or badam -- almond itself doesn't have much salience in the south. That's the reason we have not got there.

Right, sir. This is very helpful, sir. Sir, second question is, sir, the CSD trouble started I think with the name change and after that our sales have never really recovered there. This also coincided with them reducing their own procurement overall. So going forward, do we see the sales coming back to the previous level or, for us, CSD is no longer the place at which it was earlier?

See, if you look at the name change that happened, and after that, we actually lost sales last quarter -- last year, last -- first quarter, right? I mean, that's where the sale has actually gone off. So if you look at H1, if you look at not the quarter, but H1 -- quarter, again, we declined. Yes, you are absolutely right. But if you look at half year, the CSD numbers are flat, actually flat because first quarter because there was low base, near zero base, we had grown on that. But having said that, one of the key things that we need to do as far as CSD is concerned is monitor our own founds a little better. I think that is something that we can clearly do much better on. And going forward, I think we need to do a little bit more focus on CSD. CSD is not something that can be -- that will go away. While because of the regulations, et cetera, CSD demand has come down, I think there is a lot of work that we need to do from our end, which is something that we would want to focus on. So I don't know when we'll be able to do that, but that is something that we need to come back to. I mean, that's not a channel we will -- we can ignore or would want to ignore.

Right, sir. And just a small part. What was the peak level of CSD that you're doing? And can we reach that in percentage of sales?

I really don't know. Percentage of -- see, these are very speculative questions because in terms of absolute numbers, if you want to reach, I mean, the percentage will depend upon how we are doing in general trade, modern trade, e-commerce, et cetera…

So sir, even absolute number is fine. Like any absolute number also if you give a clarity in crores, what is the sales that we could achieve?

See, at this moment, I -- if you ask me, I don't think we have got that kind of a clear strategy as far as the CSD is concerned, which I can tell you that clearly these are the numbers that we can reach at. I mean, clearly, this is something that is work in progress. And maybe by the next quarter, we'll have a little more story to tell on CSD. But at this moment, I am not able to say.

The next question is from the line of V.P. Rajesh from Banyan Capital.

Most of my questions have been answered. Just one question [Technical Difficulty] revenue in this quarter and the year [Technical Difficulty]

Mr. Rajesh, your voice is breaking up. Can you speak a little closer to the device, please?

Yes. Is it better now?

Yes, sir.

Yes.

Okay. My question is just trying to understand the revenues from Nomarks in this particular quarter. And what was the decline year-over-year?

Nomarks has declined. And the decline has been about 30% as far as business is concerned, about 30%.

Okay. And what was the revenue this quarter?

I mean, let's keep it at that. It's about 30%, and the revenues are not so very substantial. So it's marginal revenue really.

But what I was trying to understand is if you exclude Nomarks and exclude sanitizer, what would have been the decline year-over-year? That's really what I'm trying to get at -- or growth? So if you take out sanitizers from this quarter, and if you take out Nomarks from this quarter, what is the year-over-year growth or decline, whatever it was?

There will be a marginal growth.

Clear marginal growth. Okay, that's helpful.

In the quarter.

The next question is from the line of Sunil Jain from Nirmal Bang Securities.

I would like to know exactly how much is the contribution of new products or new SKUs in this quarter or maybe half year? And is there any strategy to push for new -- these type of sales, like new product or new SKUs?

See, as far as the new SKUs, there are no new products which were introduced. As far as the new SKUs are concerned, salience of these are marginal. So really speaking, I mean, we have just been launching them, I mean, in September, in August, actually, 300 ML, 500 ML of Amla came into being -- the 35 ML, which is the INR 20 pack, also came into being in the end of August. So really speaking, the numbers at this stage are marginal. So we'll have to see how the numbers pan out in Q3.

And second question about this Nomarks, no doubt, our sales are declining and we are not focused. But the way it is declining, it may -- it looks like we may not have this brand in over a period of time, whereas we had spent a lot of money on that and this can be -- this is somewhere there in the market. So don't you think you need to support a bit in this -- to this brand at least for -- to maintain the sales, so whenever the opportunity comes, you can increase it.

Absolutely correct. So while -- you're absolutely right. I mean, while in terms of our effort and direction, ADHO remains a key focus area, some of the other hair oils as well, we are looking at Nomarks more as an experimental thing as to what we want to do about it and where at a little lower cost, if we can come back in some other way. So we are internally trying out certain things at this moment. I don't want to talk about it because there is not much to say at this stage. But hopefully, some of the experiments, we'll see how they pan out and maybe by the next quarter we'll be able to say something, if at all it works.

The next question is from the line of Harit Kapoor from Investec.

Just had one key question on the INR 20 pack, which you spoke about. The Nielsen is growing it's growing the fastest in the Hair Oil segment. So in your opinion, is this to do with the fact that rural is growing faster than urban, which is probably the only relevant reason why it's growing so fast? And also, the second thing on that is, if this continues to be a faster-growing SKU, how does that impact mix and profitability for the segment?

See, profitability will not get really impacted. So really speaking, if you look at the entire ADHO portfolio, the gross margins remain between 62%, 63% right up to 72% or so. So more or less, it plays between that at average of 65%, 66%. These are the kind of numbers that we will make. So really speaking, not too much worry as far as gross margins are concerned. But the fact that you said, yes, is it for the rural market, et cetera, yes, rural market uptick clearly is backing this product. So at this stage, INR 20 package is going well in the rural market, I mean, very initial signs. And going forward, as I said earlier, I mean, clearly, that was a gap in our portfolio itself. So whether 20 ML -- INR 20 would have come up from Nielsen as a gap or not -- as the fastest-growing market or not, we would have anyway launched this INR 20 because there was a gap there, and we don't want in ADHO any gaps to be there. So this was something that was anyway envisaged. It has just hastened the launch because we saw this is the market, which was growing, that's it.

The next question is from the line of Sarvesh Gupta from Maximal Capital.

Congratulations on a decent set of results. So first of all, I also like to thank you that this is probably the first time in the quarter where we've seen the conference call invite being posted on the BSE website. I hope these small, small incremental positive changes keep happening as you have taken over the company. Secondly, on the dividend side, I could not understand. You said that this was an aberration -- the last year was an aberration. So does it mean that from this financial year onwards, we will continue on the dividend policy that we had FY '19 and before that?

Yes, as I said, again, more than an aberration, it was an exception for an exceptional year. And while I will not be able to give guidance on the dividend itself because that's not a call that I take, that's a call that the Board takes. But I would like to assume and think that, that should not keep changing year-on-year. This was an exceptional year, and I would like to think that this was an exceptional year.

Okay. Secondly, now these days, we are seeing a lot of online-only brands as well as -- even in the Hair Oil segment, you see plenty of new players trying to sort of enter into this area, especially at the premium end of the range, because now they are able to kind of bypass the traditional distribution route and sell their products via online-only medium. So given that, how do you look at this threat to us because there are a lot of healthy or premium sort of options, which are available to the customers now, and they are also digitally advertising their brands and promoting it very heavily on some of the Amazons of the world, et cetera. So how do you see this threat? And what is going to be your strategy to kind of save the company or save our own brand from the potential fall in sales because of this?

Yes, I don't see it as a threat, I rather see it as an opportunity because if you look at the price points are so different. I mean, we are looking at hair care products, which was INR 1,000 for 30 ML. So I really don't see whatever else we could do in ADHO, how that customer is the same customer. Really speaking, this is now talking of growing the market and basically hair care being the larger format rather than hair oils as such. So the chances of losing to these customers, yes, obviously, there will be some lapsers and some gainers from various areas. So really speaking, it's not a large set that we are really worried about that we will lose ADHO sales to a significant amount or even some percentage points, I do not see that happening. We'll keep monitoring this space obviously. But I see this as an opportunity, and this is something that many companies would want to jump into the bandwagon. As traditional FMCG companies, most of us are not that well equipped to handle this kind of change in consumer behaviors, the way you reach to the consumer, et cetera. And that is something that whoever turns out the best will be the gainer. And that is something that we'll have to keep focusing on. Separate as an alternate channel itself, not to do with your traditional. I mean, traditional, we don't see it going to go away very soon. So really speaking not worried about the traditional channel -- traditional business, traditional channel, traditional modes.

The next question is from the line of [ Imran Khan ] from RatnaTraya Capital.

Sir, just one question, and this is maybe more on the brand side, not the operations and other things. Since we are also selling the other hair oils like Amla, et cetera, so do you think that, I mean, this can have an impact, a negative impact on our brand equity? And henceforth some people, some -- let's say, some percentage of the customers may say now that this is also now an Amla brand, so maybe I'll switch to some other premium hair oil or some percentage would say [Foreign Language] why to buy the Almond Drop now, let's buy the cheaper one, Amla [Foreign Language]. So do you think that this can also happen? And do you see any signs of this happening because you are already selling it?

See, you've actually introduced 3 things: one is the company; one is the brand; and the other is the category. So 3 things jumbled up in one question and you have to ask as a consumer, what do you look for? Do you look for the brand? Do you look for the company? And do you look for the category. Actually, you look for all 3, and there is a 3-way intermix between the 3 of them. In this particular case, Almond Drops Hair Oil clearly is a category leader. I mean, there are brands which are available in almond, me-toos or whichever way you would like to say that, at nearly half the price, at 60% the price, ADHO salience still remains strong. That should tell us as far as the category is concerned how we are staying. As far as the company is concerned, really speaking, I'm not worried about how -- because you are not getting into something, which is really cheap or really something completely different. I am not very sure almond oil users really will shift to an Amla oil because the company, which was the parent company launched that particular product. These products were always there. If you look at Brahmi Amla Hair Oil is how Bajaj Sevashram was famous for in the earlier days, right? So brands gets built, not really companies. I mean, companies are obviously associated with brands. But in this particular case, brands actually have the say. In many consumer goods, you will know the brand rather than even the company. So really, we are not too worried about almond drop customers downgrading to Amla. Yes, some of it will get downgraded, some of it will be lapsers, some of it will be gainers from some of the categories. At the end of it, if 1 plus 1 turns out to be 3, that's good for all.

And sir, what about the other part, let's say, if somebody says [Foreign Language] now Bajaj is also in Amla, so why not buy some other premium that can -- can this happen?

Sorry, come again? Can you repeat that question, please?

So, sir, my question is, since right now, we were only -- or a large part of the focus was on ADHO, right? And if we start advertising, let's say, more Amla also, right, if people -- some customer may feel that this is a cheaper hair oil or this is not a premium hair oil. So those premium customers may feel like that why -- let's move on to some other premium hair oil.

I am not able to understand that. Most companies will have absolute, absolute ultra premium range and right to the absolute economy value-for-money range. I mean, in fact, most companies will have 3, 4, 5 categories within the same product categories. Really speaking, I don't see how brand interplays happen for a single company. I am really not worried where a premium customer, because Bajaj has really introduced something else, goes to that, unlikely. I mean -- or the value of the company deteriorates because it has launched also another value pack. I think right now it is not about that, yes.

The next question is from the line of [ Naman Kumar ], an individual investor.

My question is with respect to in continuance of uptown properties someone asked. So this -- what I understand is this is some land parcels in Mumbai, right? So can you please let me know what is the total size of land parcel? And what could be the latest valuation of that?

Mr. Maloo, can you respond to this question? Mr. Maloo, are you there on the line?

Yes, yes, yes, I'm very much there on the line.

If you can take this question, please?

Yes, so the total FSI is 55,000 square feet available to us for building and the market price is around INR 140 crores.

Okay. And then the other thing was -- and I think it got discussed earlier as well, like the plan is to build a corporate office and which will house other Bajaj Group as well. I know the plan is not for the coming 1 year or 2 years, it may materialize in 3rd year or maybe in the 4th year. I just wanted to know when other Bajaj Group companies come and set up their offices in the building, which will be built, is there a plan to charge rental from them? And if there is what is the…

I mean, that will be at arm's length, I mean, clearly, what legally you are required to do so. And it will be absolutely at arm's length at market valuations. Yes, absolutely.

Okay. Got it. And then at any point in time, historically, has that analysis been done? How much is the cost involved in building the project? And how much is the rental other group companies will begin? Just to know like how much capital will get used? And if it -- if the building gets built and how much return or how much earnings one can expect from that capital deployment?

Yes. Mr. Maloo, do you may want to answer that or I can take that if you want?

Sir, you can take that.

Yes. So as far as the rental returns are concerned, as I said, it will be based on the market valuations, et cetera. Really speaking, I don't think there are some massive calculations, which have been done as to much will be the rental return and hence IRR calculations, et cetera. It was more to build a corporate office, more to build that image, et cetera, for the organization. So really speaking, an IRR calculation from that angle would not have been done. But clearly, it can be done -- I mean, we can look at the current rentals, et cetera, and extrapolate what would happen after 3 years and what kind of floor space you will be giving to the various companies, et cetera. I mean those calculations can be done. But at this stage, it will be theoretical and that has not been done.

Yes, yes. Fair enough. Maybe when the time comes, then we may have more clarity on that.

Absolutely.

As there are no further questions, I now hand the conference over to the management for closing comments.

So I think, thank you, everyone, for an extremely engaging interaction today. It was -- really, it gives us also a lot of introspection, possibilities and also scope for us to improve as a company because you all have so much of experience across various industries, et cetera, and whatever you say, we try and factor it in, in our -- this thing -- as long as it makes sense for us. So we appreciate your valued advice and feedback and we will continue to seek them as we go forward even beyond these conference calls. So from the entire team of Bajaj Consumer, I take this opportunity to wish you and your family a very, very happy festive season. Stay safe, stay healthy. And while signing off, I wish that the economy and the businesses across the country recovers and revives in the second half of the year. So best of luck to all of you, best of luck to us and everybody else. Thank you.

Thank you. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.