Jyothy Labs Limited (532926) Earnings Call Transcript & Summary

Hi, everyone. It's an absolute pleasure to host the results conference call of Jyothy Labs at ISEC. Today, we have the management represented by Ms. M.R. Jyothy, Managing Director; Mr. Ullas Kamath, Joint Managing Director; Mr. Sanjay Agarwal, Chief Financial Officer. At ICIC, we have had a constructive view on Jyothy Labs as a business, as a stock for a long period of time. And the current results of 15% revenue growth in times like this is extremely pleasing to see. Our constructive view remains. Now over to the management for the opening remarks. And after that, we'll have the Q&A. Over to you, sir.

Thank you, Manoj. Thanks. A very good afternoon to all of you. Before we take you through the specific quarterly performance numbers, let me briefly update you on the sector trends we have observed from a ground level assessment. So we have witnessed -- I'm sure the rest of the presentation would be in front of you, so I'll quickly go through that. So we have witnessed a healthy consumer demand trend across home and personal care categories in which we are present. And the emphasis on health and hygiene immunity continues. Strong rural demand continues. And now also, we have seen improved urban consumption trends, which were affected for the last 2, 3 quarters. Specific to channels, growth is -- was already there in general trade. Now we have seen gradual recovery coming back in institutional business, almost back to pre-COVID levels, which is a healthy sign for future. Two other interesting phenomena which we are observing. One, consumer channel preference is shifting towards omnichannel approach. And second, also, there is an acceleration in adoption of digital technology. And technology, as all of us know, by concept, is disruptive. So the same GT shopkeeper is also using a basic technology of, say, WhatsApp to reach out to consumers. So a lot of lines are getting drawn in the old process. And further, all this data is helping us to do a very focused GTM. So accordingly, we have grown our business strategy in sync with this changing environment and focusing on the same, which has delivered another quarter of our revenue performance. In terms of our portfolio, which is essential day-to-day household consumption, our focus was on do a very sharp execution and keeping a very strict focus on financial matters, which has led us to deliver a double-digit sales growth in quarter 3 of FY '21. Moving on to the next slide on the portfolio. A diversified portfolio has helped us in outputting the competition and also supported us in terms of the strategy for the whole organization. Backed by the strength of our portfolio, we have been -- we have focused or reprioritized our go-to-market strategy. Safe urban, we have been more frequently servicing retailers, which helps them in better offtakes. In terms of the rural coverage, we've always been focusing on that. 40% of our business comes from rural. But we are now adding more sub-stockists, doing drives like van coverage to improve or enhance our rural coverage. In terms of new launches, we have always focused on innovation and continuing that strategy on innovation. To add on -- in our hygiene portfolio, we have added Exo All Surface cleaner, which has been launched in south of India. We'll talk in detail about it. Further, all this thing, digital has been the forefront. And I guess for all of us, it has -- I mean the whole COVID period has accelerated the need and the adoption for it. And we have been quite focused on that to get all the sales efficiencies and focusing on the digital consumer engagement. In terms of the media spends, we have been speaking about it in the past. But this quarter, we have actually stepped up on our media spend with a very clear strategic intent, grow market share. And we have seen this quarter that we don't have official numbers, but our internal estimate's confirming -- we believe that our market share across the categories have further improved. And lastly, but not the least, on the employee, human resources. In this uncertain environment, keeping our teams fully motivated has been our key focus to continue our growth. In addition to keeping strict internal financial principles, we've also focused on improving how we can improve the ROI of the business partners so that we can have minimum stock, and we can do frequent servicing at the retailer level. Keeping in mind our principle of no credit. So the entire business, 100% is on cash and carry, and all the primary sales are 100% backed by secondary numbers. So overall, we are happy that our Q3 numbers, we have performed better than the previous year and also better than the Q1 and Q2 of this financial year as well on all the parameters. In terms of the specific numbers, our net sales are up by 13.3%. FMCG sale is up by 15.1%. Our gross margin has been flat at 48.8% in spite of inflationary pressures -- minor inflationary pressures, which we have been seeing in raw material. And this has been mitigated by building in efficiencies in our manufacturing operations and also higher contribution from our personal care portfolio. As part of our focused approach, as our brands are doing well, our A&P spend have increased by 40% to INR 35.3 crores in this quarter. And our EBITDA for this quarter stands at 16.7% versus 15.8% in the same period last year, an increase by 20.3%. Consequently, our PAT is up by 18.2% at INR 53 crores. Similarly, for the 9 months ended December 31, our revenue is up by 7.3%, FMCG business up by 8.9%. Operating EBITDA stands at healthy 17.2% versus 16% of the same period last year as well as the PAT is at INR 163.4 crores, an increase by 20% over the last year. Moving on to the next slide on category wise net revenue. So with respect to -- all the categories have started performing well: Fabric Care, 2.3%; Dishwash, 21%; HI, 10%; Personal Care, 48%. Leading to an overall growth of 15% in the FMCG business. Next slide is on -- a snapshot of our financial performance and key financial ratios. Just to sum it up again, revenue up on a consolidated basis at 13.3%, operating EBITDA up by 20.3%, PAT up by 18.2%. So net-net, if I sum it up in all round performance, and this actually leads us into a virtuous growth cycle because higher volume growth gives us -- we have our manufacturing plants. 75%, 80% of our production happens in our own factories. We are able to bring down the unit cost of production. More money for our brands and which again leads us into higher revenue growth. A quick snapshot or an understanding of how the EBITDA has moved from last year to this year. There's been an increase in media spend. In spite of that -- but in spite of -- due to the lower other expenses, we have still been able to increase our EBITDA from 15.8% to 16.7%. Moving on to the -- talking about the specific brand performance and initiatives. Our category wise business share stands at Fabric Care is 37%; Dishwash at 38%; HI at 10%; and Personal Care, 11%. So fairly well distributed in all the 4 categories in which we are present. Talking about each of the categories. Fabric Care business, as you know, we have 2 portions, one is main wash and post wash. So main wash, which was struggling for the last 2 quarters, has started doing better with modern trade and canteen store department almost coming back to normal. So that's a good sign. And in terms of the post wash, which is still constrained because offices, schools, colleges have yet to fully resume, but we have seen month-on-month improvement in post wash, both Crisp & Shine and Ujala Fabric Whitener. Moving on to the next slide. On Ujala Fabric Whitener, which is we are the market leader, we continue to increase our retail visibility. And demand has revived post easing of lockdown. So that's on the Ujala Supreme. And similarly on Crisp & Shine, which is more of a specialty post wash product, the brand is seeing an improved growth over the previous quarter. And we believe once the lockdown or people are able to move and office goers and school and colleges fully resume, Crisp & Shine will also be fully back to normal. Similarly for Ujala Instant Dirt Dissolver, there, the detergent brand, we are only focused on Kerala, it starts -- it's doing well. It's the largest mid-priced detergent brand in Kerala. Similarly on Henko, the growth is back with modern trade and CSD channels almost normalized. And we continue to see a good growth in e-commerce also on Henko brand. And therefore, our TV campaigns have been pitching the target market to reach out to consumers. Moving on to the Dishwash segment. There's been a renewed focus on hygiene. So we are obviously benefiting from the tailwind on that. But alongside with that, we have been taking a very focused distribution drive both on Exo and Pril. And we believe that this growth, what we have seen of 21%; and for the 9 months also, we have seen a 20% growth, is sustainable as brand has started doing well with consumer. And a few specific actions like to focus on smaller packs for new consumers entering into the branded Dishwash category, that has paid off well. So we remain quite optimistic on our Dishwash business going forward. And along with the TV media spend, we have also been doing marketing efforts on digital and social media. And this is to reach out to consumers because through these channels, we can experiment a lot of new ideas, different content, messages in a unique way. And so that's done pretty well. The next slide, we have launched Exo All Surface Cleaner. It's a very interesting product because it meets the consumer demand, fills the need for both cleaning as well as it acts as a disinfectant. So this is -- we have launched very recently in south of India. And this is, we believe, is going to be a product which will fill in the demand of the consumers going forward. So again, it strengthens our entire Exo portfolio with Exo Bioh being there. We launched GEL. And now with the All Surface Disinfectant, the whole portfolio becomes far stronger. The next slide is to summarize Household Insecticides. Basically, in terms of our innovation journey for any particular category has moved on or has demonstrated over a period of time to fill the consumer current and future demand. So way back in January '19, when we changed the entire Exo brand, we added a ginger twist in that. With that, adding the Exo Gel and the Pril Tamarind in the pouch. And in the last 3, 4 months, added a vegetable cleaner and now all surface cleaner. So the objective is just to demonstrate and keep emphasizing that we are committed on our innovation journey. And all these products have been very successful to bring the whole potential of the Exo brand. And it also shows excellence in our innovation. And we've always believed in quality of our innovations versus quantity, and we'll continue this journey in Dishwash and all other brands where we are present. Moving on to HI. Last 2 quarters have been well. And we continue to see healthy growth in this category due to consumers adopting a cautious, preventive approach toward health. And also, our brand has started doing very well with a specific focus on liquid vaporizers and -- which is more season-agnostic. So yes, coil remains a larger portion of our business as of now, but liquids have started doing well, and the overall growth in this quarter has been 10%. And we believe we would have gained decent market shares as well. Again, on Maxo, we are committed to higher TV media support and also doing digital campaigns, focusing on few key states to generate offtakes. Moving on to the Personal Care, which is around 11% of our total business. But this has done very well, 48%, and completely demand-led secondary growth. This is because primarily Personal Care is Margo, 100-year-old brand and a neem-based soap, hand wash and face wash. And we have seen a good response from consumers backed by a higher media spend, distribution drives and finally, consumer liking natural-based products like neem. So overall, we continue to invest behind this brand and normal channels, digital medium. And we expect the momentum to continue in this category for us. With that, I will come to the last slide, the way forward. We're quite optimistic on our business prospects. We believe we are at an inflection point. So our core essential and hygiene portfolio with our focus on consumer-driven brand and innovation and investment, focus on technology and new ways of doing distribution, bringing efficiency, we believe we will be able to capture higher market share. And with a focus on strengthening our brand franchise, we will -- we expect that we'll be able to deliver profitable volume-led growth. There will be -- we expect there will be some inflationary pressures in key raw material primarily in Personal Care and soaps category because, as you all know, the palm oil prices have been higher. But we will hope to balance it with some price increases, strategic price increases. A bunch of cost optimization initiatives have been undertaken. And maybe balance the trade schemes to support a healthy cash flow management. Further and finally, with our diversified portfolio, we aim to drive a full potential of our business categories with enhanced media spend and geographical expansion, which will drive sustainable growth for us in the future. So with that, I will finish my presentation. We are happy to answer your questions and clarifications you need. Thank you very much.

[Operator Instructions] The first question is from the line of Tejash Shah from Spark Capital Advisors.

Congrats on good set of numbers. From the presentation, it seems multiple interventions have been made in sales and distribution in terms of both expansion and efficiency. So if you can give some insights on the measures taken and any numerical target we are chasing here in terms of distribution expansion.

It's Jyothy here. So like you rightly said, yes, there has been multiple interventions and especially on the general trade. As such, we have seen good momentum happening in general trade and more so led by rural. And what we have done is we have -- one is our sales force who are a committed number of salespeople who go daily and refill the stores. Also, they have specific targets of increasing the number of outlets. That is -- one is through that -- and then there is another set of drives which we undertake to run distribution and things like that. So those are the areas specifically on distribution that we are focusing on. It also -- the SKUs that are at INR 5 and INR 10 segments also help in doing us -- doing this thing much more in a better way because most of our products have that price, the INR 10, INR 5 SKUs. And that also helps us in increasing the net worth to that -- I mean the sales to that extent. So it's more because your modern trade and your CSD was -- as all of you know, has been hit in the last 1 year. It's improving gradually and almost coming back, but largely led by the general trade sales. So we have witnessed all of this. And most of our brands have that INR 5 and INR 10 SKUs, which has helped us an entry into all these rural areas.

Very quite helpful. Any numerical target in terms of distribution expansion we are running with?

We'll be...

So we are able to -- I think the whole objective of the principle for us is to add or improve the efficiency of the existing stores. So if you are able to sell 2 lines or 3 lines, the objective is to sell 4 lines there and increase the productivity of productive calls. So we are more focused on that rather than just taking a numeric number and driving to that point.

Fair enough. Second, if we see the margin trajectory for both this quarter and 9 months this year, we have done very well versus our targets in the past. And the source of margin expansion so far has been other expenditure. So anything structural here that we are doing? Or is it just the operating leverage which is playing out for now?

To -- both the things playing. One, obviously, higher volumes give us better utilization at our manufacturing plant. So it helps us in a gross margin level. And also since the sales force for us is on our payroll. So a higher volume throughput obviously brings down as a percentage on the employee cost. And in addition, for the last few months, as things have become standstill in April, we did look at some of the cost items across the P&L, and we did take some of the steps to optimize the overall cost, which maybe more -- some of them will stay permanently. And as things like travel costs and all, as of now, they have had a very far lower number. But they will come back, but not to that extent where we were earlier. So a bunch of things at the operating cost, brand level as well as in the sales and other administration expenses.

Sure. So sir, on that point, would there be any change in our long-term guidance or medium-term guidance on margins?

So as of now, for this financial year, as we have guided 15% to 16%, we'll stick to that. For the next year, once we have completed our budget, then we will definitely give our guidance for the next year maybe in the next analyst call.

We are about 16% for YTD FY '21. So are we seeing there will be sharp dip in 4Q for margins?

No. So I think there is no other operating reasons. The only thing we're still holding up to that is we are -- if we need to increase our media spend, we would rather do that and also build up the base for our next financial year growth. So that's only one place where we would have increase in our what we call as investment behind our brands where the spend will be more than maybe last year what we had seen. And therefore, we'll rather keep the guidance at 15% to 16% to have that leverage with us.

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

Just a couple of questions. Firstly, on the detergent performance. So your entire portfolio ex Ujala Liquid group, how would you have seen the kind of recovery rate, say, October, November, December? If you could give us some sense on where the recovery rates were and what are the exits. As you're getting out of December or early Jan, are you -- is that entire portfolio, which is -- it's a combination of Ujala and Kerala, Henko, Chek, Mr. White across -- are all now on the growth path?

Yes. Most -- all of our detergents are back on growth path. One is backed by most channels are now -- especially the modern trade, the Henkos who -- mainly modern trade-driven, especially the matic versions and the premium products. So a lot of contribution from modern trade was there. While the other brands are -- Ujala is specifically in Kerala, and we have seen pretty good growth there. Mr. White also has done well in the region that it is present. And basically, the detergents portfolio is back. Also post wash, if you see Ujala Supreme is also coming back broadly on plan, almost, say, 90%, 95% it is coming. And in the next 1 or 2 quarters, you will see a positive -- much more contribution happening from that brand. Crisp & Shine definitely is a specific product usage. It's a very different specialized product and has much to do with a larger usage, more than white as in -- it's for coloreds as well. And there, you would -- we expect that, again, once things are open and back to normalcy, that should come back on track. That is especially -- and that is -- the thing is that Crisp & Shine is specifically right now only in 2 states, which have been badly affected by COVID, one is [indiscernible]. So that's one other reason you would see the sales not happening as much as desired. Whereas here, with Ujala Supreme is a national brand. And hence, you could see a much more better recovery there.

Got it. Very clear, right? Just my second question was on the -- your disinfectant and hygiene brands. So obviously, Exo Dishwash continues to do very well, the entire Dishwash portfolio. But I just want to get your sense on 2 pieces. One is, how do you see T-Shine in the current context of hygiene requirements as a brand? And secondly, is the disinfection launch for Exo, how you -- how do you see that as playing out? Is it -- do you think it's maybe a quarter or 2 late compared to probably what the market desired? Or do you think there is a huge opportunity still there? That's it from me.

Yes. So on T-Shine, we are very well poised for better growth there. As of now, T-Shine toilet-cleaning is only in Kerala. And the floor cleaners we have launched in the other southern states. And we also -- in the current context, from a product delivery, it's far superior compared to the competitors and has a unique offering there. Also it has the corona kill. 99.9% coronal kill claim as well where we have got that claim certified by an international lab. And hence, we are -- on that hygiene portfolio, we are very strong. We will see how these states deliver and then we take a call on whether we go national. So that's on T-Shine. And your second question was on -- Exo was always -- has always been -- always talking about health and hygiene right from the day it was launched back -- way back in 2000. And we were the first antibacterial dishwash bar in the country. And to strengthen the Exo portfolio, we have won the consumers across in the south and then be the international after 10 years. And we have seen a very good acceptance for the brand, obviously led by media spend and a good brand ambassador for it. So -- and that has proven that the brand has got fortified in the last 1 year. It is also led by, yes, some in-home consumption because people were confined to homes, they were having multiple eating occasions and washing the dishes. So yes, that is there. But I think a lot of trials also have happened along the INR 5, INR 10 segment where we were able to reach. So a lot of trials has generated. And we expect and assume that at least from a number of people who would have tried, many of them would stick back to the brand since it offers high quality -- since we have a very high-quality product there. Now to strengthen that is why we have also entered into a surface cleaner segment. We -- from a coronavirus thing, maybe we are, like you said, a little late into the -- this thing, but we have a very differentiated proposition here and a very different product. So what we do is it's not just disinfecting. If you would have seen, most of the players in the market are for disinfecting and are alcohol-based products that are there. So -- and they do maybe one job at a time. And we have here something which a product that delivers. Our app has a truly differentiating factor. And that delivers the cleaning aspect exclaims for grime and dirt completely off the surfaces. You can use that in your kitchen without any fear. It is totally alcohol free. And we have a 24-hour germ protection as a strong point there on -- if you see other players, you will have to use it multiple times. In a day maybe once it gets -- and there is no guarantee on the infection thing. Here, we have a 24-hour claim. And it's also better, 99.9% coronavirus [ scale as ] well. So we have a very strong product with us. Everything now we're trying to -- depends on the investment and how we are able to cut the ties from a consumer, just saying. So with that, we strengthened the Exo portfolio and to Exo will become much bigger there. And that's what we expect there.

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

Congrats on a good set of numbers. My question is on the HI segment. So in spite of good top line growth, we are still not making any money on this segment. And basically, I know your strategy is to sort of increase the proportion of the prices and reduce the proportion of coils, and that is how the margins for the segment will improve. But if you could give some guidance on time line here, and then what kind of margins we expect from this segment? Or I mean if it is going to be a very long haul on this, would you consider hiding off this segment and concentrating on the hiring of this segment and concentrating on the parts of your business, which are actually value hurting.

So thanks, Percy. Percy, as you know, this is one -- we are in coil segment. We have a 20%-plus market share. And in liquid segment, we have out pan-India basis. We have a 8% to 9% market share. So having said that, we have always believed that this is one growth market for us because in India, the [indiscernible] are not going to go anywhere. And it's a very 3 player a 4 player game. So we have done -- our machine has started doing well if you're coming only from the margins perspective. One, it is only 10% of our total business. And in that, we are shifting more towards liquid, and that has started giving us very good results. So to your point, when will we make profit? Even today also, we are making profit on the whole HR business it's just that we are maybe over investing or investing ahead more on the liquid vaporizer segment. Rajkummar Rao is our brand ambassador. We have been growing in some of our noncore strength markets as well. So having said that, I think another 3 to 4 quarters, you can easily see, we will have far better profitability after spending media numbers also in the HI category.

Okay. Second question is on the margins for your business. So among all the listed FMCG companies, our margins are at the lower end of the band. So how do you look at this over a 3-, 4-year kind of horizon? Is there a secular margin growth every year that is something that you would target? Or is it that -- I mean you think that with the low-hanging fruits are done and you would rather sort of take margins at this level and reinvest in growth? Some thoughts on that.

Yes, yes. Good question, Percy. So we have -- if you see last 4, 5 years or 6, 7 years, our trajectory of EBITDA growth has moved from 12 -- 11%, 12% to 16%, 17% now. So that is one of the past. Second is, if you compare each of our portfolio with the segment results, each of the companies declare. And so each one of them, we are on par with, whether it is Personal Care, whether it is detergent or Dishwash. So if you look at each category by category, we are doing a comparable numbers, and we are not on any lower side, in any case, for any of the categories. If you look at -- put together, as of now, our Personal Care portfolio is only 10%, 11%. And hence, if you see most of the other FMCG company, maybe which you are alluding, they have a higher Personal Care portfolio, and therefore, leading to an overall higher EBITDA margins. And we are on that journey. So 12%, 13%, we have been able to grow to 16%, 17%. Personal Care business is doing well. Liquid vaporizer is doing well. In Pril and -- where the margins are a little higher. Ujala Post Wash, where the margins are higher. So there is a clear strategy and a focus for us to go and increase market share and revenues for those brands to increase -- every progressive company would aim for that. And we have shown in the past and our clear strategy -- if you see the numbers here also in the 15%. What we are seeing, Personal Care has a higher growth. Even in HI, liquid vaporizer has a higher growth. So all in all, yes, we would be aiming for a higher-margin profile in coming next, as we said, 3 to 4 years, definitely, yes.

The next question is from the line of Gaurav Jogani from Axis Capital Limited.

And congrats on the great set of numbers. Sir, I have two questions. The first is, sir, the other expenditure this quarter have been quite low. So is there some one-offs in there? Or is this a sustainable expenditure? I mean the percentage of sales can be sustainable going there.

So there are no one offs. If you -- because the volume growth is 15%, as a percentage of other expenses remain more or less same. Factory expenses, other administrative expenses remain same. So as a percentage, they show a lower number. But -- and obviously, we have taken some wherever smaller cost optimization we could have done. We have already done in like 2 quarters back. So no one-offs for now. If the volume growth, we are able to maintain at these levels, yes, other expenses as a percentage of sales will broadly be the same.

Sure. And sir, another question is with regards to the tax rate. I mean the tax rate has been quite lower at this end. So what would be the guidance going ahead for the next quarter and the next year? I mean what should the tax rate would be built?

Yes. No, very clearly. We are continuing to be in the [ mac ] for this financial year as well as for next financial year. We can very well take a tax rate of 18% to 19%.

For this full year '21 and '22, sir?

Yes, that's right.

Okay. Okay. And sir, last question from my end is the Personal Care growth, it's been quite encouraging to see the sustained growth rates that we have done. I would like to dissect the growth, I mean, in the Personal Care, specifically, what segment is growing? And what is the element of price increase here?

So the Personal Care segment here is largely led by the Margo store here, which is 100 -- which enjoys 100 years' brand equity. The others, hand wash is just a year old, and it is yet to make its contribution where you can count that. But yes, it's -- from a growth perspective, definitely, that is also growing and a promising segment there as well as the face wash. Face wash, we had launched only in 1 state about a year back, and we have -- actually, we take it on a larger level. So as of now, it's largely led by our Margo neem soap.

The next question is from the line of [ Shalini ] from Goldman Sachs Asset Management.

Yes. So I just wanted to check like, ma'am, this growth that we have seen overall, 15% in the FMCG is that -- can you just give us how much the volume growth was during the quarter?

So volume growth is also similar, around 15%.

Okay. And -- okay. And sir, like, if you can just say -- see urban -- rural has been doing well for everybody. I'm sure it has done well for you also. But if you could just say how much the urban and rural growth has been for you. I mean break it up typically.

Yes. So if we look at it, urban, as you know, most of the metros, Mumbai, Chennai and some of the larger cities were affected, both from general trade as well as on the modern trade business, which in the last -- this quarter, they have become more or less normal. And so if you see now also, rural continues to be on a higher growth. If you want a number, it can be 1.3:1. The growth in urban is 1, then the rural growth is 1.3.

Okay. Okay, okay. And sir, so would it be correct to say that now you are basically back to pre- COVID levels, that's correct to say?

Yes. Yes, that's right. I think from a supply chain, we got a line in -- by May, June of this year and now from all the channels and brands. More or less, yes, we are back to pre-COVID. And as the trends are good, our brands are doing well. The recovery for us or the performance for us has been far better.

Okay. On receivables, basically, the margin trade has done very well. And there, the receivables I believe were higher. So I mean would you say your net working capital is higher? Or what would it be? Like 20, 21 days or will it be higher?

No. So general trade depends on cash and carry. Modern trade is generally 21 to 30 days, which has been in line with what we were earlier. CSD is one, which is on the higher number of days. But as of now, it's -- there are no signs of worries, and it's all very much in line with what has always been there. So working capital has been pretty good from the last 2, 3 quarters.

Okay. And channel inventory, I mean, is channel inventory lower than what it has been in the previous quarter? Or what is the channel inventory like?

Yes. So channel inventory with our general trade distributors is in the range of 2 to 3 weeks. And -- which is what they need to keep to do the servicing to the retail market.

Okay. Okay, yes. And your outlook for your main categories like Dishwash and basically your fabric wash. What is the outlook there? I mean, we have growth in the first 9 months. So would you say this kind of growth will continue?

So yes. Like you said, we have seen good growth in the Dishwash segment. Like I said earlier, it's been -- one is brand-driven, there has been strong demand for the brand. Second thing is, it is also led by in-house -- people staying in-house and obviously, multiple number of dishwashing that is happening. But like I said, we were able to do a lot -- many trials, which has happened in the INR 5, INR 10 segment in both the brands and more coming from [ Google ]. So where we feel that whoever has tried our product definitely would stay back, majority of them because one is, we offer great quality product along with the [indiscernible] proposition that we have. So yes, long term led with brand investments and distribution, yes, we are on a strong [indiscernible] as of now from our Dishwash portfolio. And detergents is coming back to its original levels and in pre-COVID levels. And we -- as we see modern trade and we've come doing well now, and they are also poised for growth. So from there, we'll be getting our premium products where we are in the detergents category, we are -- we will be seeing those growth as well. And the other mass segment, detergents will be led by [ DT ].

Okay. And ma'am, lastly, like what is the plan for debt reduction? I mean, generally, will you be paying back INR 100 crores or so for each year? Or will it be lesser like INR 50 crores of each year?

Yes. So [ Shalini ], as of September 30, our stand-alone balance sheet was in net cash. And on a consol basis, we were at around INR 50 crores, INR 60 crores. And we hope by end of the year, March 21, we should, on a consolidated basis, also debt-free.

Okay, okay. Gross debt free?

I'm saying net debt free.

No. No, gross debt will be like -- will you -- will it be lower by INR 50 crores or something?

Yes, yes. So it will be INR 60 to INR 80 crores gross debt, which will be at sub-5%. [indiscernible] so there, where we have a very fine rate, and we'll rather continue that. And -- but that will be very, very minimal, around INR 50 crores, INR 60 crores.

The next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas.

Most of my questions have been answered. Just one on this small pouch strategy, which you are focusing on in the sorting space. So what is the current contribution? Because I think you have launched it in July, so what is the current contribution from small pouches in the dish washing space? And where do you see this over the period of time?

Yes. So the pouches will help us drive scale in the Tier 2, Tier 3 cities. And right now, what we are doing is we have just -- we had the pouch packs in the beginning as well. We have just strengthened it and have launched it in 2 more places. It won't be a sizable number right now, but going forward, like I said, all these actions that we have taken from a distribution point of view, that will [indiscernible] segments that will be -- the segments that will drive growth for it.

So is it helping you to improve penetration in rural or Tier 2, Tier 3 rows, especially the distribution penetration? If not the exact [indiscernible] at least from a distribution perspective, it is helping you to improve the penetration.

I didn't get your question.

I'm sorry. Since you have launched small pack, is it helping you to get more traction in stores?

Yes. Yes, yes, yes. So we had launched Pril Tamarind a new variant last year. And we are seeing huge growth coming in from that pouches, especially. Especially in the south as well. And a good demand led -- so we are seeing that kind of success, and we will be taking it to the entire country, yes.

The next question is from the line of [ Sam Ramji ] from SMC Global Securities.

See, I have certain questions, which I want to ask. First of all, what is the percentage of advertisement revenue of Main's percentage as a means going forward? Because I was looking through your numbers, it is close to 7.3% in this quarter, which has sharply jumped from 5.95%. So I just want to ask if -- my first question is the -- will it be 7.3% or more than that in the upcoming quarters? Second question is, as I was in your previous call also last quarter, you have stated that your CSD department sales are not doing good, and still you have stated it has just started improving. So I want to know what is the percentage of the CSD revenue in your total sales? And thirdly, you have posted volume growth of 15%. What is that -- driving this volume growth? And will it be sustainable going forward? If you can answer, first of all, these 3 questions.

Yes. So first question, at percentage, yes, it has increased from previous 6% to 7.5%. And that's part of a very thought-through process that we are focusing on our distribution. We are doing innovation. And we have seen that even in this quarter when our media spends have gone up, they have paid off. So yes, incrementally, going forward, we would like to increase our media spend. And the percentage can be -- it will be keeping in mind the overall EBITDA guidance what we have. So that is on the A&P cost. Second question you said is on modern trade and CSD. CSD is -- and modern trade put together is around 20% of our total business. And so that is 1 ratio, which in recent times, the last 2, 3 quarters had marginally come down because modern trade and CSD were not doing that well. doing as well. But on a medium-term basis, that ratio will remain the same. And the third question of yours was -- sorry, what is the -- what is that thing?

What is that thing -- what is the driving force behind this FMCG volume growth of 15%? And will it be sustainable going forward? Or is -- a little bit hiccups will be there at the end of the day in the upcoming quarters in the FMCG volume growth, I'm talking about?

Yes. So if you see what we expect our growth is going to be a steady growth. For the last 2 quarters, you've seen a better performance from our side. And if you even look at it, all the building blocks have been over there. Now we are even strengthening them. And we believe that going forward, also, we should have a much better growth than what we have seen now. And it's going to be an all-round performance for us.

Great. And sir, last question is, what is the percentage of your sales from the e-segment, if you can give some -- that number in terms of percentage?

Yes. So a year back, it used to be 1.5%. Now it's around 3% of our total revenue.

[Operator Instructions] The next question is from the line of Kaushik Poddar from KB Capital Markets.

Yes. I happened to be from the Kolkata, the eastern side of the country. I don't see much of your presence in the retail shops and not even on the e-commerce sites. So what's your thought on this issue?

Sir, which brands are not, just I would want to know that.

I don't see, for example -- I have seen Margo and Pril. Other brands, Exo and all this thing, I haven't seen as much as it should be there. It isn't available as much.

Okay. So it should be there, sir. The only thing is Exo is coming from East is a big contribution for us, and it's a very big growing brand for us. After Southeast is the next, indeed, for us from an Exo point of view. So definitely, I would want to know which other retail outlets, specifically that you have not seen it. And if you could send that, we'll do the needful, if any, miss is there from our side, yes.

Okay. And even on the e-commerce side also, I don't see many of your products. I mean is there any kind of reason? I mean whatever the local e-commerce sites, whether it's a big basket or anything of that sort. In Eastern region, I don't see much of them, much of your product.

Okay. Noted, sir. Big basket we have there. We are -- we restrict ourselves mainly in grofers because if you go by their principal, they say every day lowest prices, then obviously, we have certain margins to be followed. And we -- not all our SKUs will be there in that specific e-commerce channel. Rest, most of the places we are there, sir. And whatever you have said, we have noted. We will try and see if whether we can take that and do the needful, yes.

And my last question is, in your Personal Care, the growth has been huge. I mean, can we -- I mean, are you doing something to really ramp it up to, say, 20% of your turnover?

Yes, sir, we have -- one is, like I said, again, everything, finally, the answer leads to distribution, and we are very much focused on that, and especially the -- in the Personal Care segment, also the INR 10 is doing really well for us. We'll be taking that to many other places as well. And definitely, we will see a lot of momentum happening on that brand, especially also, we are in the natural space. And if you see in the last 2, 3 years that natural space has been doing well and more so this year. And we have Main as the main ingredient there, which also is a hygiene related ingredients. And hence, we are seeing good growth.

Yes. I mean, Margo, for example, is -- it used to be a very popular brand in eastern part of the country. So I thought that maybe some more promotion will help.

Yes, sir. We have -- we do have a lot of promotional SKUs as well. And this year, we celebrate 100 years, and we will see a lot of activities on the brand.

Ladies and gentlemen, that was the last question for today. I will now hand the conference over to Mr. Ullas Kamath for closing comments.

Thank you very much, every participant, and we have shown a robust top line growth, gross margin, EBITDA and net profit, and hope to continue to have the same momentum. And if you have any further questions, you can please contact Sanjay Agarwal, and thank you very much for your participation.

Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.