Dabur India Limited (DABUR.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q2 Results and Investor Conference Call of Dabur India Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Isha Lamba, Head, Investor Relations and M&A. Thank you, and over to you, Ms. Lamba.

Good evening, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to the earnings conference call pertaining to the results for the quarter ended 30th September 2025. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer; Mr. Ankush Jain, Chief Financial Officer; Ms. Gagan Ahluwalia, VP, Corporate Affairs; and Mr. N. Krishnan, GM Finance. We will start with an overview of the company's performance by Mr. Mohit Malhotra, and this will be followed by a Q&A session. I now hand over to Mr. Mohit Malhotra. Thank you.

Thank you Isha. Good evening, ladies and gentlemen. We welcome to Dabur India Limited conference call pertaining to the results for the quarter ended 30th September '25. In India, this quarter was marked by government's announcement of a landmark GST reform, a pivotal step towards enhancing affordability and increasing consumers' purchasing power, thereby laying the foundation for stronger consumption and demand acceleration. Nearly 66% of our portfolio benefit from the rate reduction, including key categories such as Juices, Toothpaste, Hair Oils, Shampoos, Glucose and proprietary Ayurvedic Medicines. With this, 86% of our portfolio is now at 5% GST. We demonstrated operational agility by executing timely price reductions across the portfolio, effectively transmitting the benefits to the consumers. While the GST reduction is structurally positive, it led to a temporary disruption in trade as the channel anticipated forthcoming rate reductions following lower MRP. This resulted in a short-term moderation in sales in our India business during September. This quarter, our consolidated revenue grew by 5.4% year-on-year with international business reporting a growth of 7.7% in INR terms and India FMCG business growing at 5.7% year-on-year. In the India business, HPC portfolio performed well with 8.9% growth year-on-year. The toothpaste portfolio continued its robust growth trajectory and delivered strong growth of 14%, led by Dabur Red franchise and Meswak. Recently launched swadeshi campaign for Dabur Red has garnered a positive market response supporting volume momentum and strengthening the brand equity in the competitive toothpaste segment. The Herbal segment growth in the category outpaced the Non-Herbal segment by 770 bps underscoring the strong and sustained consumer shift towards natural and Herbal Oral Care products. Leveraging this shift, our portfolio outperformed overall Toothpaste category growth, resulting in robust market share gains. Skin Care portfolio registered a high single-digit growth driven by Gulabari and Oxy franchises. In the Hair Oil portfolio, Hair Oils grew ahead of the category and gained market share of 232 bps. Shampoo category posted high single-digit growth. We remain focused on premiumizing and expanding our new age offerings in both hair oil and shampoo portfolios. The Home Care portfolio delivered mid-single-digit growth driven by robust double-digit performance in Odonil, strong performance in Sanifresh. Odonil’s growth was supported by double-digit growth in gel pockets and aerosols, resulting in market share gain of 127 bps. In our Health Care portfolio, health supplements grew in the mid-single digit. Honey continued its leadership position and recorded a broad-based volume net growth of 28% year-on-year. Premium variants like Sunderbans and Organic Honey witnessed good traction. We continued to gain market shares in Chyawanprash and Glucose in the portfolio. In the digestive portfolio, Hajmola franchise posted robust double-digit growth with variants like Chatcola, LimCola, Mr. Aam now contributing more than 50% of the overall brand franchise. Within OTC and Ethicals, Honitus registered a strong growth of 28% driven by a surge in demand during monsoons. All the key variants such as cough syrup, drops and hot sip grew in double digits. Ayurvedic Health Juices continues to perform well witnessing 25% growth. Overall category was impacted due to GST transition and discontinued diaper business. In Juices and Nectars our premium portfolio Réal Activ 100% Juices continue to scale rapidly and reported a robust growth of 45% led by a twofold increase in Coconut Water sales. Nectar sales were impacted by heavy monsoons across the country and floods across Jammu & Kashmir, Himachal Pradesh, Punjab and Uttarakhand. However, we continue to outperform the J&N category gaining market share of 115 bps in Nectar and 1000 bps in Activ Juices. The recent GST rate cuts from 12% to 5% on juices is anticipated to act as a strong demand catalyst going forward. The international business registered a growth of 7.7% in INR terms and 5.5% in constant currency terms led by a CC growth of 12% in Dubai, 10% in Nigeria, 37% in U.K., 11% in Namaste business, 37% in Turkey business and 13% in Bangladesh business. Europe was impacted by geopolitical disturbance in Nepal, which declined by 15%. The situation has since improved and the new interim government has been formed. Talking of profitability, operating profit grew by 6.4% and PAT grew by 6.5% during the quarter. Despite the GST transition, seasonal headwinds and high inflation, both operating profit and PAT grew ahead of its top line in stand-alone and consolidated business on the back of price increases and cost saving initiatives. Looking ahead, we remain optimistic about the sequential recovery in demand supported by improving macros, good monsoon, recent GST rate reductions and expectation of a strong winter season. We are pleased to announce the launch of Dabur Ventures with capital allocation of INR 500 crores over the next few years. With this, we intend to make focused investments into high potential new age digital-first businesses that are closely aligned with our strategic vision road map. This initiative reaffirms Dabur's commitment to driving innovation-led growth, enhancing its premiumization agenda and expanding participation in new consumer spaces that represent the categories of tomorrow. With this, I conclude my address and open the floor to any Q&A. Thank you.

[Operator Instructions] The first question is from the line of Abneesh Roy from Nuvama Wealth Management.

My first question is on the GST impact. So you had a very favorable base last year. And ideally, you should have obviously grown much faster, which I think you may be doing the pre-GST impact. So could you clarify how much was the GST volume impact in Q2? The market leader said 2%. And in October month, are you still facing reasonable disruption and you see normalcy coming in November or already in mid-October the normalcy has come?

So Abneesh, GST impact is in the range of around INR 100 crore give or take for us, which is in the range of around 3% to 4% for us. And since the GST announcement that is where the primary has got impacted and therefore the volume sales got impacted of the business because the volume did not happen. I’m sure the liquidation of the inventory has happened , and we've been monitoring it. Liquidation of inventory is happening. So the impact wasn’t restricted to only September. There will be a carry forward impact in the month of October and I think first 15, 16 days of October will also be impacted due to GST. But long term, I think GST has been very transformative for the country, and it will unleash volume growth, which are much better than what we've seen in the past and has more money in the hands of the consumer and the sentiment is also positive because of this GST. So that’s what I feel will be the case.

Related question, in terms of the GST cut, which categories you expect more benefit in terms of volume uptick? And in terms of lower unit packs, obviously, there will be grammage increase there. So if you could tell us one ballpark number in terms of the GST rate cut portfolio, how much is the LUP where the grammage increase will happen? That will give us some idea where at least initially the volume uptick will be on the higher side. Could you give us some insights here?

Yes. So LUPs for us contribute to around 27% of the overall business where we are doing grammage increases. So I think that is where the volume of the tonnage increase will actually happen. That's what I feel because it will be like a surrogate consumer promotion and consumer promotion also drives sentiments and therefore, uptick in terms of primary sale and also secondary sale and stocking also. And the categories which I think will get favorably impacted, first of all will be Oral Care in my view. I think that will be a pick up side. Shampoos will be a good upside. Hair oil should gain on account of this and in the Health Care Ayurvedic proprietary branded medicines should gain. So the rate has come down from 12% to 5%. So the pricing will come down in terms of almost at par with classicals here, so this will give us a headroom to take up the prices in the long term. And also consumer sentiment in terms of shifting from unbranded to branded will also happen here. Our entire OTC portfolio has actually benefited from it. Be it Hajmola or Shilajit or all other brands, also the rates have come down to 5%. That also will benefit and also in the low unit price points of beverages which is INR 10, INR 20 pack should also get a upswing as LUPs from the GST.

My second question is on the Beverages and Nectar entire portfolio has been facing this competition from Campa Cola. So specific question here is with the GST rate cut which has benefited you, how does this help in fighting say Campa Cola? Second is Campa Cola's incentives, dealer incentives almost double of Cola players. If you could tell us how does your dealer incentive compare with say, Campa? And would you need to change that? Because Tata’s NourishCo has done that, and they have seen a very good growth come back already. Would you need to do that or already you have done some action in terms of the dealer incentive?

So I think in terms of overall category now the aerated beverages , which is Campa Cola impacted our juice category because of price index, the relative price index actually went up because the price there dropped and therefore the price disparity between the aerated and the juices went up drastically with the GST reduction, the RPI is coming down. Therefore, the juices will become more affordable relative to the beverages. So it should provide a little bit of tailwind to our beverage portfolio. And that said, our beverage portfolio performance has been better in the current quarter as compared to the previous quarter, and the business has grown by around 1.5% to 2% and flat, at least has come back on the growth path. As far as incentive is concerned, what the Reliance team is offering as an incentive to the trade, we also have greased up the trade in terms of the incentive that we are giving, and we hope that we'll be able to bridge the gap, not totally, but to a certain extent, again, the rate RPI will also be index will get reduced going forward from here. We've done it a bit, and we did it after this GST and we'll continue the same going forward also.

Sure. Last question, Toothpaste, you have done quite well last few quarters. Market leader has not. So one question was you said because of the GST rate cut in terms of LUP, you do see Toothpaste gaining on the higher side for you. So I wanted to understand that bit. Specific to Toothpaste, how much is LUP? Second is inverted duty structure is a big problem for a market leader in Toothpaste. So if you could tell us from a competitive landscape, how does this help you in Toothpaste? And on an overall basis, this inverted GST structure, as a company, you also will face some issues. So if you could discuss that bit in terms of input and output, how much will be the GST service tax refund issue for you?

Okay. So in terms of overall toothpaste category, then I’ll give it to Ankush to answer the second part of the question. But overall, Oral Care category has been growing. If you look at -- I’ll split up whole category into Herbal and Non-Herbal. Herbal category has grown at around 10x of the Non-Herbal --sorry 5x of the Non-Herbal category. Non-herbal category has grown by 2% and the Herbal category has grown at 10%. So it’s actually almost a 5x higher growth. And the Herbal category is now from 30% has become actually 32%. So there is a definite tailwind towards Herbal and Natural and this is happening because of swadeshi movement of homegrown and indigenous brands which are being promoted and led this whole theme resonates with PM Modi and also of movement towards the swadeshi brand. So that campaign for us has also paid up. And I think the overall business of Oral Care is doing well and Meswak has grown at 25%, our Red toothpaste is growing at around 16%. So I think -- and the 2 brands of Babool and LDM, which has not performed also we are trying to refurbish those brands also going forward in the quarter, and you will see good growth coming back to these 2 brands also. So --and we've gained market share of 60 basis points. So competitively, we performed better. In terms of lubricating the trade from a GST standpoint, also, we've given better schemes to help and enable the intermediaries to cross over this new price, the old price and the new price kind of differential, we've offered some trade schemes and so has the competitor also offered their trade schemes there. So we’re doing whatever it takes to help Oral Care go to the next trajectory of growth. As far as the Input Tax Credit, I will ask Ankush to take that question, and I can answer in case there's any other follow-up questions.

Hi, Abneesh. So like everybody, Input Tax Credit will be an issue for us. So as you know, 90% of our portfolio approximately, 7% to be precise, has gone into 5% and remaining at 18%. So weighted average output would be around 6.5% to 7%, while our input tax, we estimate to be around 8% to 8.5%. So there is a gap of 1.25% to 1.5%, which will get accumulated. Having said that, we are working internally and also with the help of an external consultant how to bid that. We have already -- we have already identified certain action points, which we are working across sales, across marketing or even logistics to mitigate this impact. And I think we'll have more clarity in next 1 month or so in terms of implementation of those action points. But you are right, there is an inverted duty issue and which is a recurring issue as government has still not clarified what would be the probable solution. So technically and legally, you can get some bit of refund at least from the raw material and factory perspective. But from -- for services, as the legal position currently, it is not refundable. So there is an issue, and we are working towards that.

Yes. So we are actually waiting and watching the [indiscernible] to what’s happening in raw materials, and packaging material where the duty structures are higher as to what we can pass on to the consumer. If there is no resolve from the government, then we may have to take up price increases, but we will see what the industry is actually doing for the RMP. And to Ankush's point on services, we will have to see what we -- how renegotiation will happen with freight forwarders or transporters, et cetera, to put it in the price itself rather than doing. So those all discussions are actually underway as we guys speak. As far as the intermediaries are concerned, and they are facing the impact of this Input Tax Credit, there we are offering a higher credit or higher schemes for them to [indiscernible] problem in their working capital, which has got stuck with this. So we are helping our intermediaries to whatever possible extent that we can by offering them a higher credit or giving them higher schemes. But that's happening case-to-case basis.

Sir, the line for the participant dropped. We’ll move to the next participant. The next question is from the line of Mihir Shah from Nomura.

So firstly, in continuation with the previous question, post mid-October, have you seen any material improvement in volumes because of the GST reduction? Any clarification on that will be helpful.

So as I told you that it's going to carry forward for 15, 20 days. And I -- so a little bit of improvement will be there due to the festive season. So I think -- but it's still a wait-and-watch situation. I will not say that all the inventory of the old price stock has been flushed out in the system because there's a huge inventory. There will be a 15-day -- around 30-day inventory sitting at the retail and wholesale and distributors around 20 days and then also in our C&A. So all that is still getting flushed out. It is not that it is seamless. Once the new price comes into effect, which has come into effect, but entire old price inventories flushed out then we can say that things have kind of streamlined. Still a little bit of issues are there as far as the old prices are concerned with the trade and the intermediaries today.

Sir, my first question actually is on Chyawanprash sales. It seems if Honey has done so well, maybe Chyawanprash has not done so well because the category growth is relatively low. That is also on a very low base where you had destocked in the same quarter last year. Can you talk about how should one think about this category? What is -- is the category still appears to be impacted? And what can bring back the category growth going forward? Any steps that you're taking?

Yes, so I think Chyawanprash has got impacted a couple of years due to the season and the winter season has been contracted. This time, we anticipate the winter to be more severe and prolonged as compared to what has happened in the last couple of years. But initial hiccups are the fact that the trade is holding old season inventory and they are getting rid of that inventory also as soon as possible. As soon as the inventory gets flushed out, we have shifted the loading from last quarter to the current quarter, A. because of GST, B. because there’s some remnant inventory left from the previous season and we'll be loading it in the current month as we speak. Loading is currently ongoing. Loading has got delayed, which is helping us to actually clean up the system and GST has been a blessing in disguise to that extent. As far as fundamentally what we are doing to the Chyawanprash category, we being the market leaders. We have launched a couple of variants to make Chyawanprash all season brand. So therefore, rather than only a single Chyawanprash we have launched multiple variants. Now the variants are contributing to almost 20%, 30% of the Chyawanprash business. We launched Khajurprash , especially for women, and that has done exceedingly well in the marketplace. Our sugar free Chyawanprash is again doing very well in the market. In the current season also we are wanting to launch another variant of Chyawanprash. So from the way Chyawanprash, we are premiumizing Chyawanprash, so that the gross margin is actually moving up while the brand is becoming non seasonal and getting spread out as we speak. So that is one effort is happening. Our monsoon campaign had some input last quarter which did reasonably well in terms of Chyawanprash. That was second that we have done. Then we are extending formats in Chyawanprash, gummies and bars will get launched in the Chyawanprash. That is the third effort which is actually happening in Chyawanprash. So all these efforts are ongoing, plus we have unleashed a new communication which is outside of immunity and more towards long-term buildup and habit formation with the kids to have Chyawanprash on a regular basis plus using Akshay Kumar there. So that is also getting launched as we are speaking. So a lot of effort is happening plus consumer promotion is also happening. Extra grammage is being given free in the current season for the consumers. So that’s also underway as we speak. So a lot of initiatives happening on Chyawanprash.

Got it. So it seems that it can be on the path of recovery. Sir, on the winter portfolio, can you give an update on the winter portfolio loading? So while it is expected to be delayed, but it is going to be harsh. Would that be sitting in the 2Q sales? Or what can expect the winter loading to happen in 3Q, 4Q and better sales to be seen in the quarter 3 and quarter 4?

So winter loading actually got pushed out because of GST transition which is happening from quarter 2 to quarter 3. And we are, as we speak, as I told you we are doing winter loading. The winter portfolio is significant part of our portfolio in the quarter 3. So if the winter is going to be harsh, we expect this quarter to be good relatively as compared to what we saw in the past. So, I think winter loading will happen now. And if the winters are harsh and prolonged, then I think the whole company will actually benefit around 1/3 of our portfolio with the winter seasonal skew in the current quarter.

Sir, last question on the Dabur ventures that you have set up. Dabur has one of the most diversified portfolio. Which category should one think that will get attracted to this? And what is the kind of investments that you have planned out? I might have missed out the outlay on the investment side on Dabur Ventures.

Parts to the question, Mihir. Firstly, we have diversified portfolios and why Dabur Ventures, first rationale to that. And the second part is outlay -- outlay is simple. The INR 500 crore of outlay that we have kept for next couple of years and the INR 500 crores meant for digital first brand, which are future forward-looking brands so that we can get high growth and we can extend our portfolio into the new age categories of the future. So that’s the single purpose of creating this investment sort of a venture called Dabur Ventures. So that's a focused attention provided and INR 500 crore is used for taking minority/majority stake, we'll be flexible on it. In the company wherein we will be allocating capital, and we will be growing the company and if the company is able to sustain the growth, then gradually slowly acquire majority stake and therefore, harness that growth which is coming from the digital first brands. So, that's the logic or the rationale of making this investment vehicle called Dabur Ventures, yes. Just to take the second part of the question to clarify. we had done. This doesn't include other M&As like Badshah, et cetera, that we have done. Badshah, Sesa, Masala, it does not include that. So we've got INR 7,000 crores in our balance sheet. The balance INR 500 crores is too small allocation as far as our balance sheet is concerned. The other part of the fund would be used for other acquisitions as we speak. So it doesn’t impinge upon those allocations in any case.

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

Just trying to understand your performance on a 2-year CAGR basis. But before that -- sorry, I had another question before that is, can you tell me as of 30th September, what was the distributor days?

Distributor days. So Percy, the distributor days as of 30th September is around 22 days for us.

Secondly, I just wanted to understand your 2-year CAGR performance. So even if I adjust for this 4% impact of GST that you mentioned, the 2-year CAGR comes to about 2%. So how do we interpret this performance? I mean, assuming that the same underlying strength continues in the business, what kind of growth can we expect because on a 2-year CAGR basis, its only 2% as of now?

Yes. So besides the GST impact, Percy, there's been other impact of the weather, as I told you, the inclement weather, and therefore, our beverage business has almost remained flat, and that got impacted, number 2. And the third impact also came in because, as I mentioned to you this Chyawanprash loading did not happen, which I did not call out in our GST impact, which is over and above that, so that Chyawanprash loading of INR 60 crores, INR 70 crores could not happen because of the weather being and the trade carrying that kind of inventory, and we did not increase our number of days, and we are very conscious of the high teen and therefore, have not increased that. And -- so these 2 impacts are there, which also contribute to around 2%, 3% of the sales. Otherwise, 95% of our portfolio has gained market shares and the business has done well. If you look at HPC, HPC has grown by around 9% of the business. If you even factor in the 2-year CAGR, the growth are good. It's Health Care and Beverages, which got impacted, and that's what is flagging the sales. Plus there's been an impact of around INR 50 crores, INR 60 crores on Nepal. There was a Gen Z protest which happened in Nepal. Our international business, which is growing at double digit has done a CC growth of 5.5%. So the business got impacted because of that and also tariffs to the U.S., some bit of impact on Badshah came in and exports to the U.S., which also will get addressed. So these macros actually kind of suppressed the business growth.

Got it. Understood. So this 3% to 4% GST pipeline impact, which has happened this quarter, do you expect that, that similar amount of pipeline fill will happen in Q3?

Not to that extent as we have cleaned up the pipeline there, and we've not increased the pipeline. So -- but we feel it will be relatively better than what we've seen in the past, like the loading, which did not happen in the previous quarter should happen in if the season is doing well. So that is what we expect it to be... offsetting what we seen a depression in last quarter should happen, not completely because we don't want to increase the pipeline once again. We want to keep the hygiene at around 22% or even improve it going forward by increasing secondary and lower primary.

Sorry to interrupt you, Percy. I request you to come back for a follow-up question, please? Next question is from the line of Prakash Kapadia from Kapadia Financial Services.

Mohit, if you can give us some sense, how do we look at the business over the next few quarters? Because I would guess there are tailwinds in terms of monsoons being good, GST coming in, which was not really expected, winter is expected to be good. So in this scenario, is there a case maybe not immediate quarter, but over the next few quarters to get to double-digit growth? And is there a shift from unorganized...

Sorry to interrupt Mr. Prakash, but there's a lot of heavy sound coming from your line. Can you please speak through the handset?

So I was trying to understand, is there a case from unorganized to organized market being possible with the GT card. So you could comment on some of these factors leading to growth? And secondly, from a rural and urban demand perspective, what categories will drive growth? And premiumization seems to be doing well pretty in most of the urban markets. So is that a play for Dabur? Is the time right for new product launches at least on the urban side? So some thoughts on urban and rural on the game plan, that will be helpful.

Right. So first of all, I think let me talk about urban and rural to your last question first. So rural is sustaining growth and for the company. And also overall, I think there's a huge growth. If there's a 5.6% growth, which is happening in overall FMCG, rural is growing at 8.5% and urban is growing at around 3.6%. There’s sustained resilience in rural and so is the case of Dabur also. And Dabur growth also if you see a difference between around 400 to 500 bps difference between urban and rural growth for us also, which is the case. So we see a 7% growth happening in GT in rural, and we see around 3% odd growth happening as far as our urban is concerned. If I leave aside the modern trade and e-commerce, which is completely urban fees. So there is a tailwind of rural. To capitalize on this tailwind, we are looking at the LUP bundles and doing a lot of activation in rural and harnessing that growth of rural. So we see -- one of the pivots of growth for us is definitely bottom of the pyramid and rural and leveraging our distribution of super stockers and sub stockers also. And we are looking at initiatives of expanding our distribution going forward, reaching out to more number of villages and increasing our portfolio and increasing visibility to our state as far as rural is concerned through SFA and through BMS and upgrading our sub stockist who are greater than around INR 6 lakhs, INR 7 lakhs of turnover to become stockist. So we have a project Saksham, which is currently ongoing. And we are working on expanding our rural footprint as far as India is concerned. So we feel a huge rural [indiscernible] and monsoon has been great. Agricultural output is fantastic. Kharif acreage has kind of improved. MSPs is going up. [indiscernible] allocation is not there. So everything is in favor of rural and rural, I think, will drive the business growth, especially the volume growth forward. As far as urban is concerned, urban is also the past couple of quarters actually inching up for us. And to drive urban, we have now very systematically taken premiumization is one of the initiatives, and that was also mentioned in the 7 moves of our strategy. So we are tracking premiumization in varying category after category, we are looking at premium. As I mentioned in Chyawanprash, we are looking at gummies, in hair oils, we are looking at value-added products. And we are looking at serums in Oral Care and Home Care and Health Supplements and OTC products and in Food, wellness food. So we're looking at premiumization, and we are driving premiumization percentage of the overall mix. And the way we define is 20% higher MRP and also accretive to the gross margin of the respective category. So premiumization is the agenda that we are driving. As far as again, real rural is concerned, unorganized to organized movement, we see because the price points have got bridged between unbranded and branded. So definitely, there will be a movement happening from unbranded to branded, which I mean from unorganized to organized. And so things are looking up and season is also looking up. So for the balance of the year, we look at a mid-to high single-digit growth backed by low to mid-volume growth. We don't want to promise high here. That's the kind of guidance that we are looking at going forward for the next half of the year. The first half obviously got impacted by weather and GST transition. But the second half, our guidance remains what we had already alluded to before.

Next question is from the line of Avi Mehta from Macquarie Capital.

Sir, just a clarification. Mid-to high single digit is for the second half, sir, or for the full year? How -- I'm sorry, I missed that.

Yes. So mid-to high single digit, we are talking about the second half actually that's the guidance that we've given. So that's the second half, backed by a volume growth of around low to mid-single digit. That's the volume growth going to be, yes.

Okay. Sir, I mean, the reason why, if I may push back, sir, we have winter also working. We also -- I mean, the loading is yet to happen. We also have GST-related kind of coming back. Could there be an upside risk here that is what would be the case? Because initially, we're hoping to kind of drive a more mid-to high single digit for the full year. So just wanted to appreciate how are you looking at this guidance? And how should we see it? What is driving the expectation?

Yes. So I'm being a little -- high single is what optimistically we should be able to achieve. But I'm giving you a guidance of mid- to high to be not faltering here. But high single is what we should be achieving. Everything comes in our favor because the Gen Z protest in Nepal we did not count for, this Trump tariff, we did not. So there are unforeseen events that actually happened, which actually pushed back the business. So I'm factoring that in, in case something. Otherwise, a high single digit should look quite possible for us and backed by a mid-single volume growth, but don't hold me on to it. So that's what we think should be real.

Fair enough. Very clear. Sir, just if I may, on the margin side also, if you could give us, should we see EBITDA growth being higher than sales growth for the full year? Is that an expectation that we still have? And if I may put the next question, sir, just clarification on Dabur Ventures. While I understand the philosophy, could you just deep dive into any categories that you would look for, in particular, whether there'll be adjacencies, new categories and IRRs? What are the metrics or things that you would kind of focus on when you're doing investments? These are the 2 questions.

So as far as margin is concerned, definitely, I think we've seen despite whatever headwinds we face in international business or in the domestic business despite GST, our margins driven by gross margins have been higher, plus there was a huge inflation, 8% inflation that we faced in the first half. Despite that, our margins have kind of held up and 20 basis points increase in our gross margin and the operating margin has also gone up and our first half margins are -- operating margin around 19% broadly. So I think for the full year, our margins will definitely be better than the top line. And we are looking at saving initiatives also in the first half, our saving initiatives in the range of around INR 60-odd crores. So we are continuously tracking those saving initiatives as we go on. So I think margins, we are good as far as currently its concerned. We passed on all the inflation to the consumer. And while we take a 5% price increase, the inflation was 8% plus saving initiatives came in. So all that we've been able to pass on. As far as Dabur Ventures, what categories we look at, we will restrict ourselves to our existing categories, and we'll not go beyond the existing categories because earlier also, there was a question on diversification. We are already quite a diversified portfolio. So we restrict ourselves to Home and Personal Care, HPC, Health Care and Wellness Foods and Beverages. That is what we will restrict ourselves and adjacencies across these portfolios which are premium, which are resonating with the digital first consumer with the Gen Z and Gen Alpha, we will get into modernization of format and any digital first company, which has got a head start to what we can do it organically ourselves is what we will kind of speak to and get the company in the early stages of its formation. So that's what this venture is meant to do. Not to get diversified into multiple other categories. We want to stick to our knitting and our categories and adjacencies, what it may be. Yes. As far as number of companies that in terms of IRR is concerned?

Yes, in terms I think -- Avi in terms of our returns, we think it should be superior than our current treasury yields…

Over the long term, we expect the returns to be ahead of our treasury. Our treasury returns are in the range of around 6% to 7%. We expect to be a little higher than the treasury over a long term. Immediately, when you acquire a company, obviously, there will be a hit in the P&L, but that will look for the long term better yield than the treasury.

Next question is from the line of Harit Kapoor from Investec India.

Just one clarification. Firstly, the presentation mentions the growth x Badshah for India FMCG. Just trying to understand why that is the case? Why you've kind of x-ed that out while giving the numbers?

So actually, as far as the published financials are concerned, we put Badshah in the consolidated numbers. So from that point of view, we've given x Badshah. That's the reason. But Badshah also the domestic business has grown well.

Got it. So the difference between the stand-alone and the India...

Yes Harit, in fact, the Badshah does not get into India. It's consolidated at a consolidated level since it's a subsidiary of India…

I understand. I was just -- I thought maybe in the presentation, you would give a consol number. I got the point for the India FMCG. So the difference between the 2 is still the export piece, right? I think you have a export piece. So that's the difference between your India FMCG and stand-alone number. That's the way to look at it, right?

That's right.

Yes, there's a piece of a private label, a piece of a Guar Gum business. There's a piece of intercompany export. All that is a difference in the India FMCG plus private label plus Guar plus intercompany exports, which comes to the total stand-alone business.

Got it. The second thing was you mentioned that you passed on this pricing about 5%. But when I look at the numbers, the 5.7% and 2% doesn't fully reflect. So I was just wondering, has that happened through the quarter? And will you see this kind of 4%, 5% on pricing in quarter 3, quarter 4 going forward? Is that the right way to think about it?

Yes, the pricing will lap over -- not lap over. Pricing will carry forward in quarter 3 also. We expect an inflation of 7%. So this will carry forward into the quarter 3 also because we've just taken the price increases also. The difference why it strictly doesn't add up is because a lot of trade schemes and consumer schemes also go which gets netted off on the top line. And that is why. And we had to lubricate the trade because of GST also, we had to give additional schemes. So they get netted off on the top line itself as well because that's a primary driven schemes that we operate in. So that's why you don't see a full difference between the 2.

And Mohit, just on this -- just a follow-up on this part. So the gross margin actually sequentially has improved quite a bit, 300 basis points despite your lubrication of the trade and not the full impact of the pricing. So is there a mix element here also because Toothpaste has done better, Foods, not so much, which would have driven a higher GM and that should to some extent normalize in the quarters going forward as foods also starts to pick up?

Yes. So let me try to answer. What we're seeing is sequentially it is up by 300 bps. But as in the seasonal business. So in the first half of first quarter, it is more Juices, Glucose and other stuff. But here, you start with Chyawanprash and some bit of Honey itself and hence, the seasonality. And therefore, you can't compare sequential margins in our business because of seasonality.

If you look at the Y-o-Y, I think year-on-year, Harit, that's a better way of looking at it. And there, it's a 20 bps improvement. There's not a 300 bps. Sequentially, the portfolio differs. And you rightly to your point, Juices did not do as well. Juices is very high in the first quarter. So I think Juices doesn't -- the season ends in the first quarter and it went into a lean quarter in quarter 2. So that goes down, which is inherently a low gross margin as compared to Health Care and Home and Personal Care which is a high margin for us. It's a category play and a product play. And that is what is impacting the margins on the positive side.

Fair. And my last question is on ventures. So Dabur Ventures, is there a separate team leading this initiative?

Yes. We've got Mr. Abhinav Dhall, who has joined us from McKinsey. He's a expert as well as private equity venture capitalist, and he's got a huge experience and very talented gentleman. So I think he will be heading Dabur Ventures. And if need be, then we'll be supporting him with other members also who will be exclusively working on Dabur Ventures. But today, he will be exclusively leading this whole venture.

Next question is from the line of Mehul from JM Financial.

Sorry, my questions are answered.

The next question is from the line of Nitin Gupta from Emkay Global Financial Service.

First question is around like --your guidance around mid to high single-digit growth in second half. If I be particular about Q3, so we have multiple benefits in terms of winter loading, primary sales shift, GST benefit. So any sense you can provide in terms of how you see the domestic growth in Q3, particularly?

Nitin, it's very difficult for me to give you a guidance of such a short-term business. Long term, I can comment upon, but short term, very difficult. As I told you, it all depends upon how the season pans out because this quarter is going to be very season dependent and very winter-centric for us and 1/3 of the portfolio is winter-centric. While our winter products are doing well, and Honitus last quarter gave us a growth of 28%, Honey has also grown by 28%, et cetera. We expect being for Chyawanprashis a big one and all depends upon how Chyawanprash offtakes and fares in the market. It's difficult for us to give you a guidance in such a short term.

This is fine. So my question was also pertaining to the price growth we are sort of having around 5%. So that itself takes to mid-single digits. So sort of any headwind particularly you see which is limiting your guidance or aspiration you can say, like we will not chase you for the number, but just wanted to have some clarity on this.

So not really. We don't see any headwind as of now. I think we are only seeing the tailwinds. The only headwind, which I told you is that the GST transition is carrying forward into the October month also. And there is the old price stock still with the trade. And till the time that gets flushed out, the whole system is not getting streamlined. So that is the only hiccup that we see in the current quarter. Otherwise, not much we have seen, even Nepal situation is relatively better as compared to the previous quarter. And we hope the Trump tariff situation is also getting resolved in the short term.

Second question is with respect to like we have the widest portfolio in FMCG. And like the question is around like how we are aligning our portfolio with youth? So HUL in this quarterly call have highlighted that Gen Z is 400 million, and they are basically driving the shift in growth, and they are looking to align their portfolio with youth. So do you agree with the view? And any perspective you can provide here?

No. So I think it's not aligning my view to HUL. I think they've got their own strategy. We've got our own strategy. As I told you, there are 2 pivots of growth as far as Dabur is concerned. One is the growth of premiumization where we are modernizing and contemporizing our portfolio in all our brands, whether it's hair oils or it's shampoos or it's home care or skin care, we are modernizing and that is towards this 400 million to 500 million cohort, which is an urban cohort of consumers. Out of that, only 2% or 3% are in the income bracket who earn more than around INR 2 lakh, INR 3 lakh per month kind of income bracket. So it's more razor-sharp approach of going to e-commerce and doing premiumization. So that's the premiumization pivot of growth. The second pivot of growth is a rural pivot of growth towards bottom of the pyramid, which is towards LUPs, et cetera. So 2 growth folks for us. One is the premium end, which is where we are contemporizing the brands and premiumizing it and making it more relevant to the Gen Z and the new generation to your point, like giving you examples like Chyawanprash Gummy is coming in. So that is a good thing. Launch of [indiscernible] that we've already done, that has happened. Launching a Shilajit raisin, which has already happened. So all those initiatives are meant to relate with the new consumer. And -- but that will be more of a premiumization, more price-driven, more profit driver. And the bottom of the pyramid is going to be more volume driver and more bulk driver for business. So that's our strategy in terms of premiumization and innovation and relating with the current Gen Z, yes.

As there are no further questions, I'll now hand the conference over to Ms. Isha Lamba for closing comments.

I would like to thank all the participants for joining today's call. The webcast recording and transcript will be available on our website. Thank you, and have a great evening ahead.

Thank you very much. On behalf of Dabur India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.