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

Ladies and gentlemen, good day, and welcome to the Bajaj Consumer Q4 and FY '25 Earnings Conference Call. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhiraj Mistry. Thank you, and over to you, sir.

Thank you, and good evening, everyone. I would like to thank the management of Bajaj Consumer to give us an opportunity to host this call. From the management, we have with us Mr. Jaideep Nandi, Managing Director; Dilip Maloo, CFO; and Mr. Richard D'Souza, EVP, Finance. Over to you, sir. Thank you.

Good evening, everyone, and thank you for participating in this Q4 FY '25 earnings call. So straight away, let me take you through the company's performance for the fourth quarter and 12 months ended March 31, 2025, before we open the floor for questions. The consolidated sales for the company stood at INR247 crores for the fourth quarter and INR950 crores for the 12 months ended FY '25. Top line of the company grew by 5.4% in Q4 on a year-on-year basis and 7.1% on a sequential basis, while registering a low single-digit decline for 12 months ended FY '25. The gross margin for Q4 on a stand-alone basis stood at 54.2%, higher by 290 basis points quarter-on-quarter, while for 12 months FY '25, gross margin stood at 53.4%, lower by 80 basis points against last year. Improved saliency of ADHO along with price increases helped improve GM percentage on a sequential basis, while on an FY basis, inflation in Copra prices, coupled with product mix had an adverse effect on the gross margin. EBITDA on a stand-alone basis for the quarter stood at INR33.8 crores, while for the 12 months EBITDA stood at INR136.3 crores with a margin of 14.1% and 14.7%, respectively. Stand-alone profit after tax stood at INR31.5 crores for Q4 FY '25 and INR130.1 crores for 12 months FY '25. The company registered PAT margins of 13.1% and 14% for Q4 and 12 months FY '25, respectively. During the quarter, general trade registered a growth of 7% on a sequential basis, while on the year-on-year basis, it still remained negative. The sequential growth was driven by both growth in the wholesale channel as well as rural. The wholesale channel, which had been an area of concern in past few quarters, showed signs of recovery with a 15% quarter-on-quarter growth in Q4. Sales in retail channels in states where Project Aarohan was implemented has shown improvement, supported by expansion of direct reach. Our retail loyalty program registered a growth of 17% for Q4 '25 and 31% for 12 months FY '25. The program outlet contribution stood at 12.5% for the quarter. This will continue to remain a key focus for the company. The RTM revamp project Aarohan implemented across UP and MP in previous quarters has started showing results. In the states, close to 24,000 new outlets were added and 1,300 new towns have brought under coverage. During the current quarter, Phase 2 of Project Aarohan has now been expanded in states of Rajasthan, Haryana, Delhi and Chhattisgarh, where reach and representation improvement opportunities have been identified and implementation is expected to be completed by May of 2025. The organized trade continued to do well, registering a growth of 30% year-on-year in this quarter and 18% in the full-year. Saliency of this channel stood at 30%. Modern trade grew by 22% year-on-year in Q4, driven by strong performances across chains, supported by customer activations during events in January. We recorded highest ever quarter for D-Mart registering a 30% growth year-on-year basis. Key packs in both ADHO and coconut oil posted over a 50% growth in quarter 4 compared to previous year. A robust growth of 43% in Q4 year-on-year was registered in Vishal Mega Mart, More Retail, which delivered a 3x business growth. Reliance Retail saw a slowdown in Q4 on account of store consolidation and registered a decline in the full-year. E-commerce channel grew by 33% year-on-year in Q4 '25 and 29% for the full-year. We saw highest ever market share of 25% for coconut oil in Flipkart under the total hair oil category. City Mall, Swiggy, Zepto, Blinkit, Myntra platforms saw highest ever secondary sales in quarter 4. Quick commerce grew by 60% over last year and 21% over Q3. Saliency of quick commerce was at 12% in Q4 as against 10% in the last quarter. Canteens and institutions also delivered strong performances, growing 42% year-on-year in Q4. CPC and CSD Canteen, while they saw a decline primarily due to high inventory levels, institutional business grew by 5x in quarter 4, supported by addition of new customers and successful launch of cross-category promotions. The international business recorded a robust growth of 30% year-on-year in quarter 4 and 20% for FY '25. GCC and Africa grew by 25% year-on-year in Q4 and 7% in the full-year. Markets like Qatar, Kuwait, Oman, Bahrain, Afghanistan and Mauritius delivered a strong 43% growth in FY '25, while Saudi Arabia registered a decline. E-commerce sales commenced in Q4 FY '25 in UAE with major contributions from the pure oil portfolio. Nepal registered a growth of 20% year-on-year and 18% in FY '25, driven by strong performance in NPD. Salience of NPD portfolio stood at 25% of our overall revenue, led by products like virgin coconut oil, coconut oil and AD Serum. The marketing efforts included digital activations of ADHO and virgin coconut oil, along with festive engagement post on social media to build consumer connect. Bangladesh continues its growth momentum, growing by 32% year-on-year in quarter 4 and 44% in the full-year. Continuous focus on improving feet on street productivity, consumer promotions delivered growth. The rest of world markets posted excellent performance with 107% growth year-on-year in Q4 and 49% growth in the full-year. This strong trajectory was led by key markets, Canada, Malaysia, U.S.A., Tibet and New Zealand. The first shipment to Amazon USA is also currently in transit, further strengthening the international footprint. Coming to the brand performances, ADHO delivered a growth of 3% in quarter 4 year-on-year basis and 11% sequentially. The growth was seen across majority packs. The INR10 SKU grew by 16% year-on-year, supported by the improved price perception and value proposition. INR1 sachet, however, saw a decline by 10% in quarter 4 on a year-on-year basis on account of consumers upgrading to the INR10, INR20 SKU. In week packs, the 45 ml SKU drove new trials and reversed previous declines with retail and wholesale both seeing good growth. 95 ml SKU grew by 8% year-on-year following the launch of a 20% extra free volume offer. In large packs, the 190 ml SKU grew by 10.5% year-on-year, driven by consumer upgrades to PET bottles and the rollout of flip-top caps, while the 700 ml SKU grew by 32% year-on-year on the back of kitted offers. Combined sales of 650 ml and 750 ml rose by 40-plus percentage, supported by exclusive kits and enhanced visibility in organization. Exclusive TV campaigns on ADHO through thematic advertising and 95 ml promo campaign led to 2,800-plus GRPs with increased focus on prime time and top-rated shows. On-ground activations at one of the largest consumer engagement platforms, Kumbh Mela lasted for 45 days, improving visibility. The digital campaign targeting urban audiences was amplified across YouTube and top OTT platforms, reaching 2.2 crore customers and generating 7.4 crores impressions. On the influencer marketing, our strategic mix of macro and micro influencers successfully engaged younger audiences, delivering 10 lakh views with a 3.7% engagement rate, which is double that of the industry benchmark. The Almond Drops hair and skin care range continued to deliver strong performance, registering a 73% year-on-year growth in Q4 and 46% growth in FY '25. Within this, the AD shampoo and the conditioner segment delivered significant business from the e-commerce channel. AD Lotions saw a significant uplift on online, supported by optimized display images, new pack launches and influencer campaigns. AD soap grew by 114% in OT channels, driven by the introduction of the new 125x 8 pack and price revisions. In AD serum segment, all channels performed well with the brand growing at 44% year-to-date, aided by positive consumer ratings and reviews, which helped drive continued traction. Bajaj 100% Pure Coconut Oil registered a significant growth in Q4 FY '25 and for the full-year, maintained consistently monthly revenues of INR10 crores and above throughout FY '25 with steady market share gains across quarters. In response to Copra price increases, 2 price were implemented in Q4 FY '25, though they remained at a lag, and hence, it was followed by a pre-teen price increase in April 2025 again. We will further take price increases based on the movement of Copra price. In Maharashtra, the largest market for coconut oil market share increased from 1.6% to 2.2% in Q4 '25, driven by targeted promotions and consumer-focused SKUs and enhanced distribution efforts. Market share gains were also seen in Bajaj [inaudible] markets, Punjab, Rajasthan, nearly 10%; Madhya Pradesh, Uttar Pradesh, nearly 7%. In Q4, Bajaj 100% Pure Coconut Oils marketing initiatives included display and banner ads for Amazon and Flipkart to boost visibility. The exclusive 525 ml pack launched in Apollo led to a 25% increase in offtake during Q3 and Q4. The introduction of the tin pack in Q3 for the Eastern markets and its subsequent expansion in Q4 across Northeast contributed to 40% of green C&O sales. In addition to this, the INR20 C&O blue pack was extended to Northeastern markets. On input costs, LLP prices continued to decline in Q4, driven by weak demand and falling crude oil prices. Refined mustard oil, however, saw a slight decline due to a favorable mustard harvest in India, although global edible oil prices continue to rise. On an overall basis, mustard has gone up over the year. Copra prices increased over the last 2 quarters, primarily due to higher demand for downstream products and supply shortages in markets like Sri Lanka, with prices expected to remain bullish in the short term. Multiple initiatives have been implemented, including optimization of specifications, development of alternate vendors, sourcing alternate raw materials. These efforts have resulted in nearly INR 6crores savings in FY '25. Additionally, productivity improvements have been driven through automation on select product lines, smart manufacturing initiatives to reduce non-value-added activities and enhance manpower productivity with improvement of 6% in Guwahati and 17% in Paonta Sahib. Our CSR initiatives have positively impacted over 16,000 families across 650 villages, focusing on rainwater harvesting and sustainable agriculture practices. As part of our ESG commitments, we are on track to meet the short to long and medium-term targets in all the key resources, both from the demand and supply side. The rainwater harvesting initiatives done over the past few quarters will result in replenishment of groundwater to the extent of 500% of our water consumption. During the quarter, the company completed the acquisition of 49% of equity share capital of Vishal Personal Care Private Limited, the company holding the Banjara brand. Balance 51% is expected to be completed in Q1 FY '26. With this, Vishal Personal Care will become a wholly owned subsidiary of BCCL. For post-merger integration, a leading consultant is already engaged to design and integrate the operations. This has already commenced in April 2025. The acquisition aligns well with the overall vision of our company, enhancing our portfolio and market presence. So as the market scenario turns favorable with food inflation easing out and hair oil showing a good comeback in the previous quarters, we are confident that the progress in strengthening capabilities that we have done over the past few years will start yielding strong results for the company in the coming quarters. The strategic initiatives of portfolio diversification, resulting in the introduction of coconut oil and others, sustained aggression in modern trade and e-commerce businesses, building a strong foundation in the international markets, which have been the key focus areas of the company have already started bearing fruit. With the ongoing expansion and optimization of our distribution network in GT through Project Aarohan, we are all set to enhance both market reach and consumer engagement in key markets across the country. The strategic acquisition of Banjara's to our portfolio will also help us establish our foothold in the much-needed markets of South India. These initiatives, coupled with stable commodity prices and a calibrated approach to pricing, rationalization of cost structures, places us well to deliver strong top line growth as well as improved EBITDA margin in FY '26. With that, I close my opening remarks and open the floor for questions. Thank you.

The first question is from the line of Abhijeet Kundu from Antique Stock Broking.

My first question was on ADHO. When I look at your revenues, also they have shown some amount of improvement during Q4 as well as ADHO has shown some amount of improvement on a sequential basis.

Yes, that's correct.

The next question is from the line of Kaushik Poddar from KB Capital Markets.

I think you have been guiding us for around 10% growth for the future years, so which has not happened this year. Can we expect that kind of growth to come back because the market itself is looking up?

See, now that the market is looking up, I think most of the drivers that you see have been put in place. All of they have been firing except the core issue of general trade and basically Almond Drops Hair Oil. And I think both of them have been a function of both in terms of market aggression that you have seen in competitive thing, both in terms of the traditional competitors as well as the digital competitors that have been there. So that has been a little bit of a pushback and overall performance in GT because we are heavily, heavily GT focused. And the other businesses in modern trade, e-commerce, et cetera, I think we are pretty well placed. So if you look at just the trends of the last quarter, and I think going forward, we are very, very clear that we would be having very, very strong growth in the coming quarters for sure, both in terms of our bottom line as well as in the top line. See, main correction that was required was basically in general trade, getting our structure right, improving our retail. We have been always a very wholesale-dominated company. We try to correct the wholesale. I don't think it worked very well for us in the, let's say, 4 quarters back, most of those corrections have happened as well as having this Project Aarohan that we are doing with one of the leading consultants. I mean, you just saw the kind of numbers we are looking at in terms of retail expansion. We are looking at more than 100,000 retailers to be added and quite a few towns that we talked about of a few 1,000 towns being added. So that itself, we feel that in general trade, that should be giving us good returns. We have also rationalized our advertising because of last year, the year itself was not so strong, we had to rationalize a bit of our marketing spend. We are now clearly going back, increasing our marketing spend in ADHO itself, that itself should give further trust and boost to Almond Drops. So with general trade and ADHO corrected and with all the other businesses, modern trade, e-commerce, whether you see coconut itself or the international business, all of them firing, I think we are looking at good numbers, both for profitability as well as sales in the coming quarters, yes.

See, on the ADHO, it's a value-added hair oil. So are we growing at the rate the whole market is growing? Or I mean, how is it compared to the market growth of value-added hair oil?

So if you look at the value-added hair oils, the market is pretty mixed. The growth that have happened, if you look at in the last few quarters, leave this quarter alone because this quarter has been very, very skewed because of the Copra sharp price increases that happened in Copra, and you have seen the results of one of the largest competitors where there is this large differential between the value and the volume growth that are there. That is basically driven by very, very skewed Copra price increase. Other than that, if you were to take back and look at the last 8 to 12 quarters, yes, Almond Drops has lagged behind overall hair oils. But if you look at within the value-added hair oils itself, if you look at the top 3 players, most of them have not done very, very well. So whether it be the low-end sarso that has gone up very highly, but not the main brand or whether it be some of the value-added hair oils for the largest competitor. So these brands have not done very well in the last 7, 8 quarters. But now that the market is looking up, now the market is showing signs of recovery, we feel these will come back very strongly.

Is it a problem with the growth in the value-added hair oil market, people are shifting to something else or something? Or why is any growth for this?

No, it's a mix of everything. I think the hair oil market itself has remained muted in the last 3, 4 years, as you would have seen. And given the last 2 years where the food inflation has been so bad, and I think you have seen that commentary from all companies coming up, all the consumer companies coming up, there has been an issue of demand itself. Now that the food inflation is slowly becoming better, while we don't have an absolute visibility that it will be extremely robust or something. But definitely, the market looks to have come out of the woods. And moment that happens, the core products will anyway remain strong, like, let's say, the coconuts and all of the world, which are the core products. But the value-added are the ones which suffer the maximum when this kind of a downturn happens. And on the reverse side, when the upturn starts happening, the value-added should show very, very strong return. We are seeing signs of recovery as far as almond drops is concerned, but I think that commentary should be there across other companies as well. And if that happens, we would be one of the major beneficiaries.

And my last question, how has the month of April been?

So month April has been good. It is going in a similar direction as that. I would obviously not be able to give you complete guidance on the month itself. But I would say that it has been more or less similar to what is happening in the quarter in discussion that we are saying. So it's been good, and I think we are pretty quietly optimistic that we'll have a good quarter as well as the full-year.

The next question is from the line of Ajay Thakur from Anand Rathi.

I wanted to understand a bit on the coconut oils market. How is it growing for '25? We have indicated around 19% growth, what would have been the growth rate for the market in the branded oil space? And how has the market share trend been on an all-India basis?

So if you look at the coconut oil market, the market grew by about double digits, a little more than double digits in the quarter and just close to double digit in the full-year. But if you look at the volume growth, and this is obviously in value terms. But if you look at it in volume terms, the growth was in low single digit. And this is mainly because of the kind of Copra price increases that we have seen. I mean if you look at year-to-year, the Copra price increase has been about 70%. So one of the things that I think we did a little late, if I can admit, is that we increased the prices a little later, which now we have corrected in April itself, and we have gone for a mid-teens price increase. So that was a little late in terms of reacting to the price increases because the way the sharp price increases that were happening, I think we missed a little bit of the board, but I think we have now corrected that and gone along with that. So this is what is happening as far as the coconut market is concerned. Clearly, now we have emerged as a very, very strong player across all markets. I mean, clearly, now that our product has been on and now we are seeing at an average of about a INR10 crores kind of a number coming up regularly month-after-month without much of an effort, much of a listing, I think, is a strong testimony of what the product has been able to establish, not only in the speaking belts where we are traditionally strong, but also markets of Maharashtra, West Bengal and even pockets of South. Obviously, South, we do not have distribution today with tomorrow with Vishal Personal Care, the Banjara's brand coming in where our distribution is expected to go up by 3x. I personally think coconut has a large potential to be able to get into that. It might take a little bit of a time to get our act together, get our consolidated approach to the market a little stronger, but I think that opens up a large opportunity for our coconut to do. So coconut at this stage, the market shares obviously are nothing a huge number to talk about, but we are now looking at a single digit, no longer fraction in the single digit, good single digit -- low single-digit market shares already coming in. And I think going forward, I think there is a good story to be coming in. And now that we are also bridging the price gap between the competitor, the largest competitor and us, I think that is where -- I have already mentioned that as far as our sourcing capability, I don't think we are very, very well off. Yes, obviously, we don't have the kind of scale of sourcing. But fortunately, for Copra scale itself doesn't make too much of a difference because it's domestically procured. It's the timing of sourcing rather than the scale of sourcing. -- that makes a difference unlike, let's say, a product like LLP or so. So we clearly have cracked that code quite a bit. Obviously, we don't have the kind of expertise of 40-year expertise in coconut, but I think we have acquired quite a bit of it, and we would really be somewhere able to challenge the top competitors. So I think we are in a good position, and this is a product which will be a significant contributor for both our top line and also our bottom line going forward.

Secondly, sir, on the non-ADHO share of the revenue, can you share insights into that? What is the current share of non-ADHO mix in the revenue? And what are targets for the same going forward?

Almond drops is at 80% or so. I mean that is where the saliency is. And now the saliency of the products beyond almond drops, I mean, all the new products as well as a bit of traditional products that we had is around close to 20%. More than what our target for that. I mean, our long-term target, as I had mentioned earlier, is getting it closer to 40%. Our objective now would be to ensure that almond drops grow strongly now that the market is coming back. Our objective focus will be to make sure almond drop grow strongly and make sure that the products beyond almond drops grows faster than almond drops. So that is one of the key focus areas. Now coconut clearly is a good product that we have. It will continue to grow. I think there is enough headroom for that product to grow. The almond drops skin and hair care range, I mean, that has already shown lots of promise. It requires more investments a bit, but I think we have slowly started garnering continuously on a regular basis, they have been also thing. So the pure coconut, the hair and skin care range of almond drops within almond drops, these 2 are clearly 2 main drivers of the portfolio beyond almond drops. And now we also have this Banjara range, which we are now exploring as to what can be further scaled up from the Banjara range because there are some very interesting products. And very interestingly, some of the products that Banjara's have established in the South are actually North-based products, whether it be multani mitti and many other gulab jal or aloe vera, et cetera So a lot of them, we are seeing how we can tactically or even strategically place in this environment. This is not going to happen tomorrow, but this is something that we will also explore and see how we can. So clearly, focus will remain on Almond Drops, grow Almond Drops, make it a strong brand back to its past glory now that the market is coming back and also ensure that NPDs grow strongly. So yes.

The next question is from the line of Abhijeet Kundu from Antique Stock Broking.

So my first question was on ADHO, the core brand. You are quite confident that the recovery has just started. When I look at your slide, then there is -- though it has grown in low single digit in this quarter, there is a sequential improvement. Also, your overall turnover also has seen a sequential improvement, which is good. But what has to work for almond drops now to really see a better growth because the large packs are doing well, e-commerce is doing well. So what are the opportunities that you are seeing? And what would really give you the confidence that almond drops as a portfolio as a whole has started recovering meaningfully? And essentially, in your core markets, right? I mean core markets have to grow at a better rate.

Yes, absolutely correctly pointed out. So as you rightly said, the large packs have been doing well. Modern trade e-commerce have been doing well and general trade is where basically the lag has been, and that's where Almond Drops has actually lagged. Now one of the 2 things that are getting -- I think one is you need to look at the way the market also has panned out other than the fact that the market itself has been sluggish. You have also seen very heightened activity, competitive intensity in the mid-packs, et cetera, not through direct competition, but also through other low-end products, et cetera, which we have seen in the marketplace and which has slowly eaten into these markets quite a bit to an extent. Now with the market easing out and our focus into ensuring that our direct reach improves as we have been talking about, I mean, we already have done an increase in retail reach of about 24,000 in 2 states, and we are looking at a number of close to about 1.4 lakh total when we do the entire India setup. Already 4 more states are already in place. So moment you look at this retail reach, so that itself and better execution as far as general trade is concerned. That is the core focus of the Project Aarohan, which we have been doing for the last 1 year. So one of the key things is to ensure that we are able to distribute ADHO much better and execute ADHO much better across the general trade. So that has been one of the key focus. As far as the product is concerned, I think in terms of the SKUs, which have been under pressure, which is typically the 45 ml, 95 ml as well as the INR10 pack, all of them, we have taken correctly of action. INR10, we told you last time that we have been working on it for a very, very long time to ensure that the margins don't suffer and yet we are able to get a better price perception. So the 19 ml, the fact short 19 ml was converted into the long fleet 24 ml giving a visual perception of a much stronger this thing. So we did a lot of engineering reengineering of our packaging design, fliptops, et cetera, to ensure that we are able to cut down on packaging cost to ensure that the 5 ml that we are putting in extra and the INR10 does not erode our margins. So that has now got rolled out. So you saw good results coming out of that. We feel that INR10 being a very, very important SKU because our INR20 is small. Our INR10 is the largest -- is a very large pack in the small pack category. So that we see a good progress happening. Both the 45 ml and 95 ml have been addressed through consumer offers because we are also looking at price indexation of the product compared to the other 2 value-added oils and our price indexation has sharply shot up in the last 3, 4 years. So that we had to ensure that we cut down. A, we did a lot of value engineering as far as the packaging material is concerned without touching the RM at all, obviously, to ensure that we are able to sponsor the corrections that we wanted to do in the 45 ml and the 95 ml. Those have also started showing results. So this is as far as the pack of the concern. So you see distribution, you see pack. The third thing is, obviously, we are now taking almond drops again, back on a strong footing as far as ensuring that we have better GRPs put in as far as advertising is concerned. Now that the market is slowly looking back, you will see further enhanced advertising as far as the brand is concerned. And we are also taking price increases to ensure that we are able to support the brand. So this is what the overall strategy as far as Almond Drop is concerned. And I think we are pretty confident that it should yield results going forward.

And on almond drops, hair and skin care range, you have seen about a good amount of growth in serum. But shampoo and conditioner looks to be a bit on the lower side. So essentially, of this whole portfolio, how big can this portfolio become? I mean, what are the short-term targets or expectations, so to say, in the next 2 years? What kind of -- the way you said that in case of coconut oil, now it is like INR10 crores a month. So INR120 crore run rate can be achieved during FY '26. Similarly, what kind of...

FY '25 is that number close to that. FY '26 will be much higher. As far as the Almond Drop Hair and Care range is concerned, we are looking at the overall portfolio because this is still a very, very e-commerce dominant portfolio. I mean we tried our -- this thing maybe a little prematurely with the moisturizing soap in the general trade channel did not work very well for us. So we are basically focusing more on the e-commerce and a few on the modern trade like lotions, et cetera, going into the modern trade. We are looking at least about a INR4 crores to INR5 crores kind of a turnover coming out of this in a monthly basis in the next 2 years or so. And based on how it performs and going forward, we'll see how we can further we can scale up. But there's also a function of how much investments we do. So it is all -- see, while I quote these numbers, you have to understand that the situation will also remain dynamic based on what kind of traction we get in the Banjara's products that we'll see, what kind of results we see out of the coconut that we have done, what kind of almond drops resilience we see in terms of both in both the work that we are doing in general trade as well as the product is concerned. And hence, the marketing monies that we will have to keep balancing. So while this is the aspirational number, we'll keep either increasing it or decreasing it and playing it in some other portfolio based on how the. So it will remain dynamic. But yes, this will be a range, which is the second range after the coconut oil as we speak today.

And in coconut oil, post the price hikes that we have taken, are you now in a position that we are profitable -- I mean, we are reasonably profitable and can scale up reasonably -- I mean, in a profitable manner?

Yes, absolutely. So coconut oil was always profitable. It is just that in the mid-cycle where we lagged a little behind because the price increases were happening fast and furious, every single consignment, it was going up. And I think we were not able to keep up pace because of some of the contracts that we had because as you can understand, our ability to change prices were not always, obviously, at the best or even our market intelligence it. That I think we have now come over this thing. April, as I said, we took a mid-teens price increase. And this is something that we have also told our teams to be very careful of and be reacting much quicker than what we have in the past. So this is something that we keep up. And coconut was profitable, obviously, not in the range of Almond Drop and it will remain profitable going forward. So that's not an issue. Obviously, not in the kind of money that Almond Drops make.

And in terms of profitability, 2 things. One is that your gross margin going ahead should see an improvement over FY '25. And overall profitability, can it go back to the 16%-odd EBITDA margin? I mean, what are the expectations there?

I think that EBITDA margin of 16% was a very bare basic minimum range. I think we are looking anywhere at a much higher EBITDA margin than that. This year was an aberration in many fronts. I mean, the correction that we took in the wholesale channel itself did not work very well for us, and it took us about 3 quarters to get a semblance of sense back into that. So certain things that we have taken to aggressively hit us quite a bit. But structurally, if you look at the 16% to 18% EBITDA margin was a given, it still remains a given. So 16% to 18%, I would think would still remain a basic bare minimum. And now with the kind of improvements that we are looking at, looking at price increases, looking at some of the restructuring of costs, et cetera, I think we should be looking at a little higher than that going forward. But I would not like to give any future guidance, but that is -- directionally, we would like to take on it for the year.

So with our almond hair oil doing well, so high single-digit top line growth could be expected? I'm not saying that we give a guidance, but...

Again, no guidance as such, but I think from the commentary, you should be able to evaluate, yes, I mean, we are pretty bullish as to -- with the market showing signs of improvement and the kind of activities that we have done over the years that we have built in all the capabilities that we have built in, I think we should be able to look at some of these. Now is the time that it will start fructifying, yes.

And in our international business, it has grown very strongly during Q4, though the overall annual growth has been 7%-odd. So with the traction that you have seen in Q4, what are you expecting? There also, you could see sort of...

I think you've got that number not right. The annual growth of international business is about 26%. And the quarter growth is 43% Yes, quarter is higher than the annual growth. International business has been continuously growing and on a quarter-on-quarter basis, on a sequential, just like the way you have seen the modern trade and e-commerce for us grow continuously sequentially. International business has grown. And my satisfaction comes from the fact that it is not only from one part of the world that this international business. It's consistent across all quarters, which is what I was telling in my commentary. Whether you look at GCC Africa, whether you look at Bangladesh, whether you look at the rest of the world, which has been one of our focus because export, we have been always not that strong. Now the number of countries increased. The margins obviously are phenomenal. They are better than domestic market. And obviously, GCC, which is -- sorry, obviously, Nepal as well, a smaller part, but also doing well. So all of them have been doing well and consistently doing. There are no sporadic inconsistency of growth, which will continue.

The next question is from the line of Dhruv from Fort Capital.

I was listening to this call and most of my questions regarding the core business has been clear. And since you're not giving a guidance as such, it is difficult to measure it anyway. But my questions were regarding the acquisitions that you've done. I'm not asking for a number guidance, but as a quarterly picture that when we'll be able to see the result of the distribution increasing for our own portfolio and for Banjara's who are North Indian routes?

So Banjar, the products are not -- the company is very, very South Indian rooted products company, but with some of the products which are North Indian routes. That's what I meant. Anyway, coming back to Banjara's, the way it is panning out is we should be completing our 100% acquisition with a tranche to buy my statement was this quarter, but ideally, we are looking at this month itself. We should have 100% control and make it a 100% subsidiary of the company of BCCL by this quarter itself. Parallelly, from April 2025, we have engaged with a leading consultant and there are multiple meetings have happened. And we are looking at about a 3-month kind of 8 to 12 weeks of project that we have embarked with them. We are looking at every single thing, how do we consolidate the business, how do we look at distributors, how do we look at structuring of both the teams, et cetera And I think within the next 3 months or so, you should see this up and running. We have very, very strong ambition as far as the Banjara numbers are concerned for this year. Obviously, again, I will not be able to give you any future guidance, but we have very, very strong aspirations of both in terms of both top line as well as bottom line of the Banjara's numbers themselves as well as with some value-adds of us, I think we are pretty, pretty buoyant and very confident of what Banjara should give us over the time. So maybe in the next 3 to 4 months, you should see numbers in terms of real sense.

So can I assume like a 50% effect like a direct fruit bearing effect in Q1 and the rest of it from Q2 and Q3 onwards?

Sorry, can you repeat that? I didn't get the...

So just how do I measure when the fruits will bear from the distribution efforts since can we assume like a 50% benefit from Q1 onwards and then the rest of it in Q2 and Q3 onwards?

I would rather look at the kind of numbers that Banjara's has delivered last year. It's about INR53 crores. And we are looking at a number which is quite significantly higher than that in the current full-year. So whether it will happen in Q1 end itself, how much will Q2, rather than that, I will look at it that it will be more skewed towards Q2, Q3 and Q4. But I think overall, if you look at that will be a very, very strong number we are looking at both in terms of top line as well as bottom line. These are the Banjara's stand-alone their own numbers. I mean, what we will do to Banjara that [inaudible]. Over and above that, using BCCL's own products as well, that will be something that will get added on to it. And overall, we are looking at a good number. I mean we have created annual operating plan as far as the combined structure is concerned. But as you can understand, because we are going through this I mean, the design phase is on in terms of designing what we will do in terms of the combined GTM strategy, the operating model, the sell-in, sell-out, I mean, how the sales process harmonization will happen. All that is going on now. And when we start implementing over the next another 3, 4 months and execute, I think then you will see the results coming out and maybe at that point of time, I hope you will also get revised plus/minus based on what we see coming out of the ground.

Sound pretty confident, and I'm going to read it as that. I'm excited about the acquisition because of the distribution rise that you're going to see. Just excited to see the numbers.

The next question is from the line of Dhiraj from ICICI Securities.

So I have 2 questions. One is, when I look at the saliency of modern trade and e-commerce, which has been growing very strongly, what would be the saliency of modern trade for the overall company? Now if I double-click on that, what would be the saliency for ADHO from modern trade and e-commerce and for Bajaj coconut oil?

See, I mean, if you look at with a 30% saliency that you are getting, now this is divided in modern trade, both B2B as well as B2C. Both put together, it's a little more than double digit. E-commerce is just a little less than double digit and the balance comes from the CSD, CPC channel. So that is how the overall this thing is concerned. In fact, if you look at this particular quarter, modern trade was high teens, actually in high teens and e-commerce was also very, very strong -- sorry, not high teens, low teens, pardon me for that. And e-commerce was also in double digits. So between modern trade and e-commerce, if you look at the 30% breakup, about roughly split equally between modern trade e-commerce, it is about 25-ish percent and the balance 5-ish percent comes from your CSD, CPC institution. That is the rough construction of that. In terms of almond drops, modern trade obviously has a large contribution of almond drops as well as a decent contribution of coconut. While if you look at e-commerce, e-commerce has nearly about a 40% contribution coming from products beyond almond drops, while 60% comes from almond drops. So that's how it is split. So almond drops remains still a very strong thing as far as modern trade is concerned, while e-commerce, obviously, because of the nature of customers, it's more varied. And all the extensions, et cetera, that you see, they are more focused.

And how that would be for coconut oil?

See, most of the -- as you can see, I mean, if you look at beyond almond drops, most of our sales comes from coconut. I mean, almond drops that hair and skin care range is still smaller than how coconut has grown. So a large part of it comes from coconut. So whatever numbers I'm talking about beyond almond drops, you can assume that 70% will be coming out of coconut, about 30%.

And related to that only, whether there would be like margin differential between general trade and e-commerce and modern trade would be materially different than what company averages then?

So not between general trade and modern trade. Obviously, modern trade is a little lower, but still equal pegging with general trade. A little bit -- it depends upon the times of the year and the aggression in the marketplace that we want, et cetera Modern trade does take a bit of a dip, but not real. It doesn't take a huge departure from general trade. E-commerce, on the other hand, there is departure, mainly because -- not so much because of almond drops, but because of all the other ranges that we need to support because a lot of investments happen as well as these products on platform investments also happen. There are the requirements of some of the larger players. So e-commerce has a little lesser -- it's a little dilutive, while in terms of general trade and modern trade, they come close to each other.

And sir, second question is related to EBITDA margin. Like we have seen continuous drop and partly it is because of mix as well as raw material price headwind. Assuming that if the raw material price stagnate at current level, when can we see that the margin trajectory improving from here on or whether we can see the amount of price hike which we had to take with the current inflation, whether we have taken completely of that or there would be some impact going forward as well because of the inflation?

See it's also -- if you look at the trend in the last few years, at points of time, we have had to lag behind the price increases, raw material. In terms of taking price increases with the consumer, we had to lag behind because of the demand situation. Now the situation is reversing where the demand situation is becoming favorable, we'll do exactly the reverse. And we'll take price increases in spite of -- may not be that much of increase as far as the RM prices is concerned, just to get back the gross margins, which also we might want to plough back into our marketing efforts, et cetera So you will see, -- so EBITDA margins have already started improving. They will continue to improve. The aberration that you see -- I mean, don't go by the aberration that you saw in the last 2, 3 quarters. They were aberrations. They happened for a cause and some of it were maybe self-inflicted to an extent. All that has now been passed us. As I said, the wholesale channel, et cetera, corrections have happened. I think going forward, you can only see improvement happening, both in gross margin profile as well as the EBITDA profile.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Dhiraj Mistry for closing comments.

Yes. Thank you, everyone, for participating, and thank you, management from Bajaj Consumer. Over to you, sir, for closing remarks.

So thank you, Dhiraj. And I think as I said this thing over so many years that we have been trying to change the profile of the company, having investment in so much of capability building exercises, et cetera I think, unfortunately, the headwinds that we saw in the marketplace in terms of just consumer demand and in terms of the competitive activity, we could not get the kind of results that we anticipated we would get. So yes, I mean a lot of areas, we got excellent results, but general trade, almond drops, which was our core business profile itself, we did not. Now that the headwinds are gone and we are seeing signs of tailwinds coming in and now that we have started investing in some of these areas where investments were also required. I think we are in a phase where we can see some good progress that happens because of the building of capability. Now we are a multifaceted organization with multiple products, multiple channels, multiple geographies. And I think that is something that now we are in a good position to exploit and make this a strong company, may not be still rubbing shoulders with the best in trade, but clearly going 1 notch higher or even 2 notches higher. So we are very, very bound that as a company we will be very, very successful going forward. So with that, I thank you all for joining this call, and I wish you the very best. Thank you.

Thank you. On behalf of Bajaj Consumers and ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.